Income Tax Offset Credit (ITOC)

This County program grants a credit against the county real property tax in order to offset, in whole or in part, increases in the county income tax revenues resulting from a county income tax rate in excess of 2.6%. The County’s current income tax rate is 3.2%, and the resulting Income Tax Offset Credit is currently $692.

The ITOC is available only to the owner of an owner occupied residential property (i.e., principal residence), as determined by the State Department of Assessments and Taxation (SDAT).

The County establishes the amount of the ITOC this section by County Council Resolution for each levy year.

This credit – described as “County Property Tax Credit” on the property tax bill - is applied only against the General County and Special Service Area ad valorem real property taxes.

The ITOC is not applied to any State or municipal taxes and charges or County Solid Waste or Water Quality Protection Charges, or WSSC charges, such as Front Foot Benefit Assessments.

State Law Change Requiring Homestead Credit Application on file with SDAT to Qualify for the ITOC

Dear Montgomery County Property Owner, 
 
There has been a change in State law that will restrict your eligibility for a $692 County property tax credit.  This new State law requires all residential property owners to also have an approved Homestead Application on file with the State Department of Assessments and Taxation (SDAT) to be eligible for the County’s Income Tax Offset Credit (ITOC).  This credit appears on your annual property tax bill.   
 
You must have an approved application on file to continue receiving your $692 credit on your annual property tax bill.   
 
This is a one-time application and must be completed to keep the ITOC tax credit that will be on your July 1, 2022, tax bill.  If an approved application is not on file by May 1, 2023, State law will require the County to recapture the $692 ITOC you were granted on your tax bill.  Additionally, the ITOC tax credit itself will no longer appear on all future tax bills until there is an approved Homestead Application on file with SDAT. 
 
The Homestead Application can be filed online or by mailing an application to SDAT.  
 
To file an application online, you will first need an Access Number issued by SDAT.  To obtain an access number, email your name and address with the subject line of “Montgomery County Homestead Tax Credit” to sdat.homestead@maryland.gov.  Within a few days, SDAT will send you your access number and directions for filing online. 
 
To file an application by mail, please complete the application form and mail it to the address listed on the form.   The link to the paper application form is: https://dat.maryland.gov/SDAT%20Forms/Homestead_application.pdf
 
Once your application has been filed, or if you believe you already have a Homestead Application on file with SDAT, you can check the status of your Homestead Application on the SDAT webpage:  https://sdat.dat.maryland.gov/RealProperty/.   
 
If you have any questions, please email sdat.homestead@maryland.gov or call 410-767-2165 (toll-free 1-866-650-8783). 
 
Please note that sometime between October 2022 and February 2023, SDAT will be changing their Homestead Application process and will no longer require the access number for the online application.