Maryland’s $5,000 Student Loan Tax Credit Deadline Approaches

Student loan borrowers in Maryland have an opportunity to ease their debt burden with a state tax credit worth up to $5,000 but the deadline is fast approaching. Applicants must file by September 15, 2025, to qualify for the Student Loan Debt Relief Tax Credit, a program designed to reward residents who continue to live and work in the state while managing student loan obligations.

What Happened

• The Maryland Higher Education Commission administers the Student Loan Debt Relief Tax Credit.

• To qualify, applicants must:

  • Have at least $5,000 in outstanding student loan debt.

  • Be a Maryland resident for the tax year 2025.

  • File their application by September 15, 2025.

• The credit applies against Maryland state income taxes, with excess amounts eligible to be applied directly toward loan balances.

• Since its inception, the program has provided average credits of $1,800–$1,870 per borrower.

Why It Matters

1. Meaningful Debt Relief: For borrowers juggling payments, a $5,000 tax credit can significantly reduce either their tax bill or their outstanding loan principal.

2. State Residency Incentive: The credit reinforces Maryland’s strategy to attract and retain college-educated residents.

3. Planning Opportunity: CPAs and advisors should ensure eligible clients apply before the deadline, as late submissions are not accepted.

Implications for CPAs and Advisors

• Proactive Outreach: Contact clients with student loan debt to confirm eligibility and application status.

• Filing Strategy: Help clients decide whether to apply the credit against taxes owed or directly toward loan repayment.

• Documentation: Ensure clients maintain proof of loan balances and residency for compliance.

Looking Ahead

While federal student loan relief remains uncertain, Maryland’s program provides a tangible, recurring benefit to borrowers. With growing calls for states to step in where federal policy falls short, similar credits could expand in other jurisdictions. For now, Maryland residents must act quickly to take advantage of this year’s opportunity.

Stay Ahead of State-Level Relief Programs

Tax credits like this show how state policies can deliver real financial impact to residents managing debt.

👉 Try Bizora today to track tax credits, deductions, and compliance changes that directly affect your clients.