On Wednesday, the Joint Standing Committees on Appropriations & Financial Affairs and Taxation held a joint public hearing on LD 1995, An Act to Make Supplemental Appropriations and Allocations for the Expenditures of State Government, General Fund and Other Funds and to Change Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2022 and June 30, 2023.
A Governor’s bill sponsored by Rep. Teresa Pierce, LD 1995 would attempt to simplify the current tax credit under the Job Creation Through Educational Opportunity Program (JCTEOP) by providing a refundable tax credit to qualified individuals of up to $2,000 of an individual’s repayment of student loans for taxable years on or after January 1, 2022. Unused credits under the previous JCTEP can be applied to the new credit for tax years beginning before January 1, 2027, subject to the annual $2,000 cap. The proposed change would expand the credit to roughly 40,000 individuals (about 13,000 use it now) and inserts a lifetime cap of $25,000. Currently, the credit is $2,500, and there is no lifetime cap.
Many legislators expressed concerned about participants who would lose benefits under the new lower credit and asked the Commissioner of the Maine Department of Administrative and Financial Services, Kirsten Figueroa, whether there is potential for those folks to be grandfathered under the existing credit. There was public testimony to that point as well.
The Joint Standing Committee on Taxation will now hold a work session on the taxation provisions in LD 1995. It was agreed that the Taxation committee should look into a potential grandfathering aspect of the credit in their deliberations on LD 1995 and report back to the Appropriations committee.
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