February 16, 2021

UPDATE: Hogan Signs $1 Billion RELIEF Act

Update: Hogan Signs $1 Billion RELIEF Act

House version approved last Friday modifies EITC payments

Introduced last month and incorporating adjustments made and passed by the General Assembly, Hogan has signed the $1 Billion RELIEF Act, delivering tax relief, grants and stimulus payments to aid Marylanders impacted by the COVID-19 pandemic.

The most significant update is a large expansion to the Earned Income Tax Credit (EITC), with an impact on some Marylanders’ 2020 taxes.

Here’s an overview of the final relief package:

Direct stimulus payments–if you qualified for Earned Income Tax Credit (EITC) in the 2019 tax year, the following applies to you:

  • (i) $300 for an individual other than an individual described under items (ii) or (iii) of this item;
  • (ii) $250 for an individual filing as married filing separately; or
  • (iii) $500 for spouses filing a joint return or for a surviving spouse or head of household as defined in § 2 of the Internal Revenue Code.
  • In addition, the EITC for eligible Marylanders would increase over the next three years. For example, a family with two or more more kids earning $25,000 a year would see the EITC amount received increase by approximately $1,100 each year – in 2021, 2022 and 2023.

More tax relief – the RELIEF Act also:

  • Eliminates taxes for pandemic-related grants and forgiven loans
  • Sets a cap on those who will be exempt from owing taxes on unemployment benefits
  • Exempts hard-hit businesses from a drastic increase in their unemployment taxes as a result of COVID-related layoffs; allows employers to hold off on paying unemployment insurance taxes until Jan. 31, 2022.

Small business support includes $125 million to fund the following:

  • $12,000 in sales tax credits and an emergency grant and loan program for nearly 3,000 businesses, prioritizing those that have not received prior assistance
  • $25,000 grants for 400 hotels and hospitality venues; additional grants for entertainment venues
  • $10 million for the Maryland Small Business Development Financing Authority, providing $25,000 grants for disadvantaged businesses
  • Job training, grants for rural, agricultural, “main street” and distressed communitiesTourism marketing support

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