MD Relief Act Summary

Maryland RELIEF Act Summary

*sources: Comptroller’s Office, Governor’s Office, DLS

  • Sales and Use Tax Credit – Authorizes eligible vendors to retain an increased vendor tax credit for the three consecutive months following the enactment of the law. The amount of the vendor credit allowed is equal to the lesser of the amount of sales and use tax collected during the month the vendor qualifies for the increased credit or $3,000, not to exceed $9,000 in three months.
    • Eligibility: a vendor must file a timely sales and use tax return or consolidated return, and; the gross amount of sales and use tax remitted with the return may not exceed $6,000, and; a vendor must choose to forgo the standard vendor credit in order to claim the enhanced vendor credit.
    • When? Credits will be granted during the months of March, April, and May 2021. If you file returns quarterly, claim the March credit on the return you file in April, and claim the April and May credits on the return you file in July.
    • Amount: Eligible vendors may claim a credit against their sales and use tax for either the amount of the sales and use tax collected during the month for which the vendor claims the credit or $3,000, whichever is less.
  • Business Tax Relief
    • Unemployment Tax Relief for Small Businesses
      • An employer’s 2021 unemployment tax rate will be calculated based on their non-pandemic experience by excluding the 2020 fiscal year, and instead by using the last three fiscal years of 2017, 2018, and 2019. This was already in effect via executive order but a change in law was necessary for it to remain in play beyond the state of emergency.
      • Small businesses and nonprofits with fewer than 50 employees will be allowed to defer unemployment insurance tax payments in calendar year 2021 to January 2022
    • The RELIEF Act’s loan and forgiveness plan safeguard Maryland business owners against any tax increase triggered by the use of state loan or grant funds.
  • Unemployment Assistance - $1,000 one-time grant payments to certain individuals whose unemployment claims have been in adjudication for 30 days
    • Eligibility: The Department of Labor determines the recipients of the grants and will submit to the Comptroller a list of individuals who will receive payment
    • When? Payments will be sent to qualified individuals from March-July, dependent upon when the eligibility is determined by the Department of Labor
  • Unemployment Insurance Income Tax Subtraction - The RELIEF Act provides a State Income Tax Exemption for Unemployment Insurance (UI) Benefits for qualifying filers. UI payments are currently subject to federal and state income taxation. Beginning with Tax Year 2020 and including Tax Year 2021, the Act exempts from the state income tax the UI benefits received by an individual earning less than $75,000, and couples filing jointly or individual heads of households earning less than $100,000.
  • Grant and Loan Programs – New grant and loan programs for businesses and nonprofits to be administered by several state agencies, and local governments (see attached for local programs)
  • Maryland Economic Development Assistance Authority and Fun
    • Grant program for businesses in distressed communities to assist the businesses in setting up an online sales framework and offering employees telework opportunities

Other provisions:

  • Authorizes the Department of Commerce to forgive up to $50,000 of a loan, if the loan was made to a small business under the Equity Participation Investment Program with the Maryland Small Business Development Financing Authority. This provision applies only to fiscal 2021 and 2022 loans provided to relieve the adverse effects of the coronavirus pandemic.
  • Creates a $420 million fund within the Department of Budget & Management to be used for:
    • Financial assistance to individuals, businesses, and nonprofit organizations
    • Funding for the Department of Health and UI program
    • The restoration of Department of Transportation transit services and highway maintenance funding.

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