The RELIEF Act of 2021 was signed into law on February 15, 2021, with the goal of helping the people of Maryland affected by the pandemic. The act brings a wide set of relief packages to different demographics. The implications of the RELIEF Act may vary from person to person and business to business based on social and economic circumstances. In this article, we’ll explore how the act can benefit Marylanders and small businesses based in Maryland.
For Low To Moderate-Income Taxpayers of Maryland
The RELIEF Act offers a stimulus payment of $300 for individual taxpayers and $500 for families to low and moderate-income Marylanders. If you meet the criteria listed below, you are eligible for the payment:
- You had applied and received Earned Income Tax Credit (EITC) on your tax return in 2019.
- Your annual income is $15,820 with no qualifying children or $21,710 with a spouse.
- Your annual income is $41,756 with one qualifying child or $47,646 with a spouse.
- Your annual income is $47,440 with two qualifying children or $53,330 with a spouse.
- Your annual income is $50,954 with three or more qualifying children or $56,844 with a spouse.
The payment will be sent directly to the bank account listed in your 2019 tax documents. If the bank account is not active anymore, then a check will be mailed to the address provided on file. Keep in mind the package is not taxable on the state level but it may be on the federal level.
For Unemployed Marylanders
The RELIEF Act also provides relief to certain unemployed Marylanders. Individuals determined to be eligible by The Department of Labor will receive a one-time payment of $1,000. The amount is not taxable by the state, but it may be deemed taxable on the federal level.
The RELIEF Act also exempts Unemployment Insurance (UI) payments from taxation for the tax years of 2020 and 2021, something that was not available in prior years.
For Small Businesses
The RELIEF Act also brings provisions to empower small businesses hit by the pandemic. Businesses will be able to receive a maximum sales tax credit of $3,000. This will cover three months of 2021 (March, April, and May), totaling a maximum amount of $9,000.
Businesses can be eligible for the Sales and Use Tax Credit if:
- They file their tax in a timely manner.
- The gross amount of monthly sales tax doesn’t exceed $6,000.
- Businesses are willing to let go of other credits.
The tax rate for struggling Maryland businesses will be decided excluding 2020 and focus on 2017, 2018, and 2019 records. Small businesses have the option to defer their 2021 UI payments to January 2022.
The RELIEF Act also funds loans and grants to local businesses. Business owners need to contact related agencies that will provide relevant invoices to the Comptroller’s Office for the deployment of loan and grant payments.
Questions? Ask our team at BradyRenner CPAs today >>
Matt Brady, CPA
Image Credit: UnSplash @ Creative Commons