College diplomas hang proudly on the walls of many offices and bedrooms throughout the state. For many recent graduates it is a reminder of a lot of good times, for others hard work, but for some graduates, it’s a painful reminder of how much student debt they owe.

If you fall into the latter category and work in Maine, there may be some relief in the form of tax credits.

The Opportunity Maine Tax Credit reimburses student loan payments for college graduates that live and work in Maine.

To qualify individuals must have graduated from a college or university after the year 2007. The general idea of the Educational Opportunity Tax Credit is that once the graduate begins to work and pay on their student loans, they can use their payment history to create a tax credit to offset all of their Maine income tax.

For individuals who earned degrees in science, technology, engineering and math (STEM), the credit can offset all Maine tax and may even create a refund. To encourage employers to join in on the act, the State also allows the credit to employers who are helping their employees with loan payments.

The criteria for this credit has changed over the years and now allows the benefit to reach a larger number of Mainers. Some highlights of the updated credit include eligibility for merchant marines who permanently reside in Maine, but work at sea to utilize the credit.

For more recent graduates, after 2015, the credit applies to Maine residents who went to school in another state and came back to work in Maine. Interestingly, to attract young entrepreneurs and those with higher degrees, self-employed individuals and those with advanced degrees also qualify for the credit.

The only drawback that I see is that the program is based on actual loan payments and thus discourages individuals from aggressively paying down their student debt. Overall, the evolution of this credit has expanded to attract more recent graduates to live and work in Maine. We all need to cross our fingers that it works.

For many of you admiring the framed diploma, rest easy, paying those student loans and staying in the state we all love, is now more affordable than ever.

We encourage individuals and employers to visit www.liveandworkinmaine.com for more information about the Maine Opportunity Credit. If you qualify, make sure that your tax preparer knows.

Jess Marin MBA/CPA is a Senior Accountant at Perry, Fitts, Boulette & Fitton CPAs with offices in Bath and Oakland. She can be reached at [email protected] .

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