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Anne Powelson Anne Powelson
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Got student loans? Don't miss this credit

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Student loans keep showing up in headlines, from the complaints from various 'Occupy' groups to announcements that cumulative student loan debt has reached one trillion dollars. The Institute for College Access & Success estimates that two thirds of graduates have student loans. Maine's class of 2010 carries an average student loan debt of $29,983. All of which makes the Maine Opportunity Credit more attractive than ever.

What is the Maine Opportunity Credit? Maine Opportunity Credit 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.
  • Completed all coursework at a Maine college or university (study abroad and exchange programs should not disqualify you)
  • Obtained an associate's or bachelor's 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? The credit can be quite significant, exactly how big depends on several factors

  • Year of graduation.
  • Associate's or bachelor's degree.
  • Monthly student loan payments.
  • Percent of degree credit hours completed after January 2008.
  • Eligible months meeting work, residency and payment requirements.

For 2010 graduates, maximum monthly credits are $343 for a bachelor's degree and $72 for an associate's degree. So those with a 2010 associate's degree and 12 eligible months would have a credit of $864.

Those with a 2010 bachelor's degree are more likely to need to prorate for classes taken before January 2008. Assuming classes were taken equally through eight semesters, a 2010 bachelor's degree recipient could be looking at a credit of $2,572! And, if you don't have sufficient tax liability to take advantage of the entire credit, it carries forward for up to 10 years.

How do you claim this credit? On the Maine long 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 your return, it's not too late; you can amend your return to add the credit.

Be prepared to document your numbers: Maine is a prudent state, and plans to give the credit only to those who prove their eligibility. You should be prepared to submit documentation to verify the date of degree, degree received, academic credit hours after Dec. 31, 2007, and educational loan payments required and made.

But 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, that information should be online somewhere.

Bottom line: Opportunity Maine is a great program designed to keep Maine graduates in Maine take advantage of it!

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