Gov. Larry Hogan has signed the Recovery for the Economy, Livelihoods, Industries, Entrepreneurs, and Families (RELIEF) Act of 2021 into law. The RELIEF Act will now provide more than $1 billion in direct stimulus and tax relief for Maryland working families, small businesses, and those who have lost their jobs due to the COVID-19 pandemic.
Relief For Individuals & Families
Immediate payments of $500 for families and $300 for individuals will be available for those who filed for the Earned Income Tax Credit (EITC). This payment will be similar to the federal stimulus payments and no additional application for relief will be necessary. Marylanders would qualify for these payments who annually earn:
- $50,954 ($56,844 married filing jointly) with three or more qualifying children
- $47,440 ($53,330 married filing jointly) with two qualifying children
- $41,756 ($47,646 married filing jointly) with one qualifying child
- $15,820 ($21,710 married filing jointly) with no qualifying children
The RELIEF Act repeals state and local income taxes on unemployment benefits for tax years 2020 and 2021.
Relief For Small Businesses
The RELIEF Act makes a nearly $200 million commitment to supporting small businesses with sales tax credits of up to $3,000 per month for three months—for a total of up to $9,000. This relief will directly help Maryland’s more than 55,000 small businesses. This Act also extends the unemployment tax relief for small businesses, staving off sudden and substantial unemployment tax hikes in 2021. This provision now codifies an emergency order the governor had issued last month.
To the extent included in federal taxable income, corporations may subtract coronavirus relief payments on their Maryland return. Coronavirus relief payments includes grants or loans applied for after March 5, 2020, that were provided to assist with coronavirus-related economic hardships. The subtraction also includes any coronavirus relief loan amounts that were forgiven.
The RELIEF Act’s loan and grant forgiveness plan would safeguard Maryland business owners against any tax increase triggered by the use of state loan or grant funds. This Act also includes an additional $500 million in new funding for programs and grants for businesses and nonprofits, housing, health, unemployment insurance, energy assistance, education, and human services.
Additional details will be provided by the State of Maryland via a dedicated website, www.MarylandTaxes.gov/ReliefAct. If you are interested in exploring how you or your business may be impacted by the RELIEF Act of 2021, please reach out to your Glass Jacobson team.