PORTLAND – Attracting and retaining quality, skilled employees has been an increasing challenge for Maine. And as with the rest of the country, so has student debt. One unique Maine program is working to try to address both of these important issues.
The Educational Opportunity Tax Credit (EOTC) through Opportunity Maine offers an ambitious incentive for individuals to stay, live and work in Maine while also helping reduce the burden of student loan debt. One of the boldest college affordability initiatives in the nation, the EOTC provides significant tax benefits to Maine residents. As the program is currently structured, individuals who graduated from a Maine college or university may qualify to receive state income tax credits on student loan payments they have made. The savings are substantial, more than $4,500 in annual state income tax credits for a bachelor’s degree and over $800 a year for an associate’s.
There is also a business level component allowing companies that pay their employees’ student loans to claim credit for those payments on their business taxes. This allows businesses to offer a valuable and distinctive benefit at a very low cost due to the tax credits they receive through the program.
Expansions of the EOTC enacted this year will further increase eligibility. Elimination of the requirement that an individual work for a company located in Maine means that as long as you live and work in Maine, where your employer is based no longer matters.
In addition, self-employed individuals can now claim the EOTC. Previously, those who were self-employed could only claim the tax credit through their business for student loan payments they made for their employees. That has changed. Now self-employed individuals can claim the tax credit for themselves, and may also be able to claim the EOTC as an employer as well.
“Many Mainers don’t realize that they qualify for thousands of dollars in tax credit savings,” explained Senator Justin Alfond, treasurer and founding member of Opportunity Maine. “We want to increase awareness of this beneficial program and encourage people to share information about it with their family, friends and colleagues,” continued Alfond. “Being able to receive substantial tax credits on student loan payments can be an extremely attractive perk for many. These expansions are a great step in the right direction to try to address the need for more workforce development.”
Complete details about the EOTC program can be found online at www.opportunitymaine.org. The site also includes FAQs, helpful resource links, and a handy online tax credit estimator. This tool calculates the amount of tax credit individuals may qualify for and can even be used to pre-populate and print the EOTC worksheet, the form residents must submit with their state tax returns to apply for the credit.
Information on filing Maine state income taxes can be found at www.maine.gov/revenue.