Many Maryland residents are eligible for tax credits, such as the Earned Income Tax Credit, the Child or Dependent Tax Credit, and the Senior Tax Credit, but do not apply for them. Professional tax and civil legal services can help residents gain access to these credits and other related benefits. For Marylanders without significant resources , however, these services often are out of reach because even when free services are available, demand far outstrips supply.
A bill pending in the Maryland legislature, HB 451/ SB 676, aims to increase the availability of free tax and civil legal aid services. The bill directs that money, including the proceeds of the sale of abandoned property, shall be allocated to expand funding for Low-Income Tax Clinics. The Clinics are operated by the University of Baltimore, Maryland Volunteer Law Services, and the University of Maryland School of Law.
The bill also directs that a specified amount of these funds will go to clinics that provide on-demand tax assistance for rural, senior, and underserved communities. It mandates that grant recipients ensure sufficient access to tax preparation services for low-income Maryland residents.
Low-income tax clinics help provide critical assistance to vulnerable Marylanders who are trying to navigate a complex tax system on their own. Tax problems can be overwhelming and complex and include issues such as the following:
- Denial of tax credits (EITC, child);
- Audits (in the U.S. those who claim the EITC are audited at a higher rate than wealthy individuals;
- Refund claims;
- Innocent spouse relief;
- US Tax Court litigation; and
Civil legal aid organizations help low-income Marylanders navigate this maze. But the clinics which provide these low-income tax clinic services, in addition to most civil legal aid services, are chronically underfunded. Thus, the Maryland Access to Justice Commission supports additional investment in these clinics.
Specifically, the bill:
- Increases the annual appropriation for these Low-Income Tax Clinics from $250,000 to $500,000.
- Increases the annual appropriation for the CASH Campaign from $500,000 to $800,000 for general operations of tax clinics for low-income Marylanders.
- From that increased appropriation, the bill establishes a $150,00 grant program administered through the CASH Campaign to be used for mobile or on-demand tax clinics that serve rural populations, seniors, or under-resourced communities.
The bill is sponsored in the House by Speaker Adrienne Jones and in the Senate by President Bill Ferguson, at the request of the Office of the Comptroller.