Maine Student Loan Repayment Tax Credit Important Information

The Maine student loan repayment tax credit also called the student loan repayment tax credit is an initiative of the Maine department of education, the department of administration and financial services provides a student loan repayment tax credit (“SLRTC”) for tax years beginning on after January 1, 2022. It is a component of the Job Creation through Educational Opportunity program, which began in 2008. The purpose of the program is to provide an income tax credit for Maine resident individual income tax taxpayers who are making eligible education loan payments on loans that are part of the financial aid package; that is, loans obtained to earn an associate, bachelor’s, or a graduate degree from an accredited Maine or non-Maine community college, college, or university after 2007.

How to qualify for this Tax Credit?

1. Eligibility: To qualify for the tax credit, you must be a Maine resident who has earned an undergraduate or graduate degree from an accredited institution. Additionally, you must have outstanding student loan debt and be employed in Maine.
2. Amount of Credit: The amount of the tax credit varies depending on factors such as your income and the amount of student loan interest you paid during the tax year. The maximum credit amount is set by the Maine Revenue Services.
3. Claiming the Credit: To claim the tax credit, you need to file Maine Form 1040ME and include Schedule APTC (Income Tax Credits for Maine Residents). You’ll need to provide information about your student loan interest payments and other relevant details.
4. Limits and Restrictions: There may be limits on the amount of the credit you can claim, and certain types of student loans may not be eligible. Additionally, there may be income restrictions or phase-outs for higher-income individuals.
5. Annual Renewal: The program may require annual renewal, so you’ll need to continue meeting the eligibility criteria to claim the credit each year.
6. Changes and Updates: It’s essential to stay informed about any changes or updates to the program’s requirements, as eligibility criteria and credit amounts may vary from year to year.

FAQ

1. Who is a qualified individual that can claim the SLRTC?

The SLRTC is available to qualified individuals. A qualified individual is a Maine resident who:

• obtained an associate, bachelor’s, or graduate degree after 2007 from an accredited Maine or non-Maine community college, college, or university;
• has a certain amount of earned income;
• lives in Maine; and
• files a Maine individual income tax return.

To qualify for the credit, the resident individual must make eligible education loan payments directly to the lender during the tax year.

Married taxpayers: If both spouses are qualified individuals, both may claim the credit based on their eligible education loan payments made directly to the lender. Each spouse must complete a separate worksheet to claim the credit.