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*sb0882*
SENATE BILL 882
Q3 6lr1432
By: Senator Kramer
Introduced and read first time: February 6, 2026
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Income Tax – Credit for Student Loan Debt of Educators Working in Public 2
Schools 3
FOR the purpose of authorizing a credit against the State income tax for certain individuals 4
who are employed full–time in a public primary or secondary school in the State and 5
have outstanding student loan debt ; and generally relating to an income tax credit 6
for student loans. 7
BY repealing and reenacting, without amendments, 8
Article – Education 9
Section 10–101(h) 10
Annotated Code of Maryland 11
(2022 Replacement Volume and 2025 Supplement) 12
BY adding to 13
Article – Tax – General 14
Section 10–758 15
Annotated Code of Maryland 16
(2022 Replacement Volume and 2025 Supplement) 17
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
That the Laws of Maryland read as follows: 19
Article – Education 20
10–101. 21
(h) (1) “Institution of higher education” means an institution of postsecondary 22
education that generally limits enrollment to graduates of secondary schools, and awards 23
degrees at either the associate, baccalaureate, or graduate level. 24
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(2) “Institution of higher education” includes public, private nonprofit, and 1
for–profit institutions of higher education. 2
Article – Tax – General 3
10–758. 4
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 5
INDICATED. 6
(2) “COMMISSION” MEANS THE MARYLAND HIGHER EDUCATION 7
COMMISSION. 8
(3) “ELIGIBLE INDIVIDUAL” MEANS AN INDIVIDUAL WHO: 9
(I) IS EMPLOYED FULL–TIME IN A PUBLIC PRIMARY OR 10
SECONDARY SCHOOL IN THE STATE; 11
(II) PARTICIPATES IN THE CAREER LADDER ES TABLISHED 12
UNDER TITLE 6, SUBTITLE 10 OF THE EDUCATION ARTICLE; AND 13
(III) HAS OUTSTANDING STUDENT LOAN DEBT. 14
(B) (1) SUBJECT TO THE LIMITA TIONS OF THIS SECTIO N, AN ELIGIBLE 15
INDIVIDUAL MAY CLAIM A CREDIT AGAINST THE STATE INCOME TAX IN 16
ACCORDANCE WITH SUBSECTIONS (C) AND (D) OF THIS SECTION. 17
(2) IF THE CREDIT ALLOWED FOR ANY TAXABLE YEAR UNDER THIS 18
SECTION EXCEEDS THE TOTAL TAX OTHERWISE DUE, AN ELIGIBLE INDIVIDUAL MAY 19
APPLY THE EXCESS AS A CREDIT AGAINST THE STATE INCOME TAX FOR SUCCEEDING 20
TAXABLE YEARS UNTIL THE FULL AMOUNT OF THE EXCESS IS USED. 21
(C) (1) (I) ON OR BEFORE DECEMBER 1 EACH YEAR , AN ELIGIBLE 22
INDIVIDUAL MAY APPLY TO THE COMMISSION FOR THE TAX CREDIT AUTHORIZED 23
UNDER THIS SECTION. 24
(II) AN ELIGIBLE INDIVIDUA L SHALL CERTIFY TO THE 25
COMMISSION THAT THE E LIGIBLE INDIVIDUAL W ILL APPLY THE VALUE OF ANY 26
CREDIT APPROVED UNDE R THIS SECTION FOR T HE REPAYMENT OF THE ELIGIBLE 27
INDIVIDUAL’S UNDERGRADUATE OR G RADUATE STUDENT LOAN DEB T OR BOTH AS 28
PRACTICABLE. 29
(2) THE APPLICATION SHALL STATE: 30
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(I) THE HIGH SCHOOL AND INSTITUTION OF HIGHER 1
EDUCATION FROM WHICH THE ELIGIBLE INDIVIDUAL GRADUATED; 2
(II) THE DEGREE THE ELIGIBLE INDIVIDUAL RECEIVED; 3
(III) THE EMPLOYER FOR WHI CH THE ELIGIBLE INDIVIDUAL 4
WORKS; 5
(IV) THE AMOUNT OF THE ELIGIBLE INDI VIDUAL’S STUDENT 6
LOAN DEBT; AND 7
(V) ANY OTHER INFORMATION REQUIRED BY THE COMMISSION. 8
(3) (I) THE COMMISSION SHALL REVIEW THE APPLICATIONS AND 9
AWARD THE TAX CREDIT CERTIFICATES ON A FIRST–COME, FIRST–SERVED BASIS AS 10
INDICATED BY A TIME AND DATE STAMP OF THE SUBMISSION OF THE APPLICATION. 11
(II) 1. THE COMMISSION SHALL AWAR D AT LEAST 70% OF 12
THE AMOUNT AVAILABLE UNDER SUBPARAGRAPH (IV) OF THIS PARAGRAPH TO 13
ELIGIBLE INDIVIDUALS WHO GRADUATED FROM A HIGH SCHOOL IN THE STATE AND, 14
IN THE PREVIOUS YEAR, GRADUATED FROM AN INSTITUTION OF HIGHER EDUCATION 15
IN THE STATE. 16
2. THE COMMISSION SHALL AWAR D THE REMAINING 17
AMOUNT AVAILABLE UNDER SUBPARAGRAPH (IV) OF THIS PARAGRAPH TO ELIGIBLE 18
INDIVIDUALS REGARDLESS OF: 19
A. THE LOCATION OF THE HIGH SCHOOL O R 20
INSTITUTION OF HIGHE R EDUCATION FROM WHI CH THE ELIGIBLE INDI VIDUAL 21
GRADUATED; OR 22
B. THE YEAR IN WHICH THE ELIGIBLE INDIVIDUAL 23
GRADUATED FROM AN INSTITUTION OF HIGHER EDUCATION. 24
(III) AN ELIGIBLE INDIVIDUAL MAY NOT RECEIVE A TAX CREDIT 25
CERTIFICATE IF THE A PPLICANT PREVIOUSLY RECEIVED A TAX CREDI T 26
CERTIFICATE UNDER THIS SECTION. 27
(IV) THE TOTAL AMOUNT OF TAX CREDIT CERTIFICATES THAT 28
MAY BE AWARDED ANNUALLY MAY NOT EXCEED THE GREATER OF $5,000,000. 29
(D) (1) ON OR BEFORE DECEMBER 31 EACH YEAR , THE DEPARTMENT 30
SHALL NOTIFY THE ELIGIBLE INDIVIDUAL OF THE AMOUNT OF A T AX CREDIT 31
CERTIFICATE AWARDED TO THE ELIGIBLE INDIVIDUAL. 32
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(2) (I) THE TAX CREDIT CERTIF ICATE SHALL STATE TH E TOTAL 1
AMOUNT OF A TAX CREDIT AWARDED TO THE ELIGIBLE INDIVIDUAL. 2
(II) SUBJECT TO SUBPARAGRA PHS (III), (IV), AND (V) OF THIS 3
PARAGRAPH, THE ELIGIBLE INDIVIDUAL MAY CLAIM A CREDIT EQUAL TO ONE–FIFTH 4
OF THE TOTAL AMOUNT STATED ON THE TAX CREDIT CERTIFICATE FOR 5 5
CONSECUTIVE TAXABLE YEARS. 6
(III) FOR EACH OF THE 4 TAXABLE YEARS AFTER FIRST 7
CLAIMING THE TAX CREDIT AVAILABLE UND ER THIS SECTION , AN INDIVIDUAL 8
AWARDED A CREDIT UND ER THIS SECTION SHALL SUBMI T TO THE COMMISSION 9
VERIFICATION THAT TH E INDIVIDUAL CONTINUES TO BE EMPLOYED IN A PUBLIC 10
PRIMARY OR SECONDARY SCHOOL IN THE STATE AND IS ON THE C AREER LADDER 11
ESTABLISHED UNDER TITLE 6, SUBTITLE 10 OF THE EDUCATION ARTICLE. 12
(IV) IF AN INDIVIDUAL DOES N OT COMPLY WITH THE 13
REQUIREMENT OF SUBPARAGRAPH (III) OF THIS PARAGRAPH , THE COMMISSION 14
SHALL RESCIND THE TAX CREDIT CERTIFICATE. 15
(V) AN INDIVIDUAL MAY NOT CLAIM THE TA X CREDIT UNDER 16
THIS SECTION IN THE SAME TAXABLE YEAR AS A TAX CREDIT UNDER § 10–740 OF 17
THIS SUBTITLE. 18
(VI) 1. THE TOTAL AMOUNT OF THE CREDIT CLAIMED UNDER 19
THIS SECTION SHALL B E RECAPTURED IF THE INDIVIDUAL DOES NOT USE THE 20
CREDIT APPROVED UNDER THIS SECTION FOR THE REPA YMENT OF THE 21
INDIVIDUAL’S UNDERGRADUATE OR G RADUATE STUDENT LOAN DEBT OR BOTH 22
WITHIN 3 YEARS FROM THE CLOSE OF THE TAXABLE YEAR FOR WHICH THE CREDIT 23
IS CLAIMED. 24
2. THE INDIVIDUAL WHO CL AIMED THE CREDIT SHA LL 25
PAY THE TOTAL AMOUNT OF THE CREDIT CLAIMED AS TAXES PAYABLE TO THE STATE 26
FOR THE TAXABLE YEAR IN WHICH THE EVENT R EQUIRING RECAPTURE O F THE 27
CREDIT OCCURS. 28
(E) ON OR BEFORE JUNE 1 EACH YEAR, THE COMMISSION SHALL REPORT 29
TO THE GENERAL ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE 30
GOVERNMENT ARTICLE, ON: 31
(1) THE NUMBER OF ELIGIB LE INDIVIDUALS WHO A PPLIED FOR THE 32
CREDIT; 33
SENATE BILL 882 5
(2) THE TOTAL AMOUNT OF TAX CREDIT CERTIFICATES ISSUED; 1
(3) THE HIGH SCHOOL AND INSTITUTION OF H IGHER EDUCATION 2
FROM WHICH EACH ELIGIBLE INDIVIDUAL GRADUATED; 3
(4) THE EMPLOYER FOR WHICH EACH ELIGIBLE INDIVIDUAL WORKS; 4
(5) THE AVERAGE AMOUNT OF STUDENT LOAN DEBT OF THE ELIGIBLE 5
INDIVIDUALS; 6
(6) THE TOTAL NUMBER OF TAX CREDIT CERTIFICATES RESCINDED; 7
AND 8
(7) AN ANALYSIS OF THE IMPA CT OF THE TAX CREDIT PROVIDED 9
UNDER THIS SECTION ON THE RECRUITMENT AND RETENTION OF TEACHERS IN THE 10
STATE. 11
(F) THE DEPARTMENT SHALL ADOP T REGULATIONS TO CAR RY OUT THE 12
PROVISIONS OF THIS SECTION. 13
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 14
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025. 15