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Maine Credit for Educational Opportunity - too good to be true?

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Did you know Maine has a credit for recent graduates of Maine colleges who are paying on student loans? Though use of the Maine Credit for Educational Opportunity is growing, from 710 filers in 2011 to 1,157 in 2012, many people still don't know about this wonderful credit.

What is the Maine Credit for Educational Opportunity?

Maine Credit for Educational Opportunity is a credit on your Maine return, reimbursing you for student loan payments made. That's right, reimbursement of the entire student loan payment, not just the interest.

To be eligible for the credit you must:

-Have been a Maine resident while attending college in Maine.

-Obtained an associate or bachelor degree from a Maine college or university after December 2007.

-be a Maine resident working for a Maine employer.

-make payments on your student loans.

How Big is the Credit?

Thecredit can be quite significant; exactly how bigdepends on several factors

-Year of graduation

-Associate or bachelor degree

-Monthly Sstudent loan payments

-Percent of degree credit hours completed in Maine and after January 2008

-Eligible months meeting work, residency, and payment requirements

For 2013 graduates, maximum monthly credits are $356 for a bachelor degree and $65 for an associate degree. So those with a 2013 associate degree and 12 eligible months of payment would have a credit of $780. A 2013 bachelor's degree recipient could be looking at a maximum credit of $4,272!

What if the Credit is More Than Your Tax Liability?

One of two things happens if you don't have sufficient tax liability to take advantage of the entire credit. If you graduated with a degree the college has registered as a science, technology, engineering or mathematics the additional credit is refundable. Otherwise, it carries forward for up to 10 years.

How do you claim this credit?

This credit is claimed on the Maine tax form. The worksheet for the credit is available at Maine Revenue's website: maine.gov/revenue/forms/credits. If you forgot to claim the credit on prior year returns, you may be able to amend your return to add the credit.

Be prepared to document your numbers

Maine Revenue Services gives the credit to those who prove their eligibility. You should mail in your Maine return claiming the credit and submit documentation to verify the date of your degree, degree received, academic credit hours after Dec. 31, 2007 and educational loan payments required and made.

Don't let the need for documentation deter you from claiming this credit

Come on, how hard is it for you to make a copy of your diploma and transcript? As to your required loan payments, your creditors should be able to provide that ask them.

Bottom line

Maine Credit for Educational Opportunity is real. If you are paying on student loans, or know someone who is, be sure to check it out.

Last modified on Tuesday, 10 March 2015 17:22

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