The Montgomery County Council introduced three tax credit bills Tuesday. Together, they would help homeowners, public school employees and families with modest incomes. None of the bills have passed yet. Public hearings for all three are scheduled for Oct. 13.
Councilmember Kate Stewart led the package. Several current and former members of the Government Operations and Fiscal Policy Committee joined her.
“The reason for this entire package of tax credit bills is really twofold,” Stewart said. “One, to assist our residents of moderate and low incomes to address the affordability crisis that too many are facing in the county and around the country. And secondly, to continue to create a more equitable and progressive tax system here in Montgomery County.”
An expanded Homeowners Tax Credit
Bill 47-26 would raise the income limit for the county’s supplement to the state Homeowners’ Tax Credit. Right now, a household can earn up to $75,000 a year and still qualify. The bill would raise that limit to $106,800, matching a federal income standard set by the U.S. Department of Housing and Urban Development for the county.
The credit is based on total household income, not on how many adults in the home work or how many jobs they hold. The Council also set separate limits in 2025 on a household’s net worth and the assessed value of the home; those limits stay in place under this bill.
Stewart said the impetus to change came directly from Habitat for Humanity of Metro Maryland, which told her office that 33% of its homebuyer program participants over the past 10 years didn’t qualify for the credit under the current $75,000 cap, even though they earned less than 80% of the area’s median income.
Councilmember Andrew Friedson said the credit could mean real money for households near the bottom of the new income range.
“Those on fixed incomes that make up to $32,500 is over $3,800 of tax relief,” Friedson said.
Stewart said the credit can also help residents who don’t yet own a home. Qualifying for it ahead of a home purchase can factor into the mortgage a buyer is approved for, she said, potentially lowering their costs at settlement.
A new credit for MCPS employees
Bill 48-26 would extend a $2,500 property tax credit to Montgomery County Public Schools employees. The county currently offers that credit only to certain first responders.
To qualify, an employee would need to live in the home for at least nine months of the tax year, according to council staff. The bill defines eligible employees as those in an MCPS “bargaining unit,” a term staff clarified during the meeting.
“Bargaining unit refers to a group or a class of roles or positions,” a council staff member said. “This is talking about if you are part of a bargaining unit where MCPS has grouped you into similar categories, like a teacher, janitor or admin staff.” Staff said that’s different from union membership specifically.
Stewart said the bill responds to educators leaving the profession or moving out of the county, in part because of housing costs. She cited a 2022 state Board of Education finding. New educators are the most likely to leave teaching, the finding showed. Black and Hispanic educators are the least likely to return to teaching in Maryland. Replacing a teacher costs the school system an estimated $9,000 to $21,000, she said.
A new child tax credit
Bill 46-26 would create a Montgomery County child tax credit, made possible by a state law passed this year. Under the bill, a taxpayer earning $15,000 or less could claim a $500 credit against county income tax for each qualifying child. The credit applies to children under 6, or children with a disability under 17.
For taxpayers earning more than $15,000, the credit shrinks by $50 for every $1,000 over that threshold.
“Child tax credits are a proven tool for reducing poverty,” Stewart said.
What’s next
The Council has not set an effective date for any of the three bills. All three still need a public hearing, a committee worksession and a final Council vote before becoming law. MCM has not confirmed whether any of the credits would apply to tax year 2027, 2028 or later
