Lawmakers want millions in refunds for Maryland taxpayers after error

Some Maryland lawmakers are calling for millions in refunds for taxpayers after the state miscalculated a tax credit for homeowners.

FOX 5 broke the story in October after a state audit showed the Maryland State Department of Assessments and Taxation (SDAT) has been miscalculating the Homeowners’ Tax Credit since 2005, primarily impacting people in Montgomery County.

READ MORE: Maryland shortchanges taxpayers millions of dollars, according to state audit

SDAT Director Michael Higgs appeared before lawmakers reviewing the audit on Tuesday.

“I’m reading an article that was written by Lindsay Watts with FOX 5 news right now, indicating that, yes, this agency has been aware of this issue for years,” said Sen. Ben Kramer (D-Montgomery Co.) “And either ignored it, failed to act on it or just outright decided we’re not going to change the policy despite the fact it conflicts with state law.”

SDAT has known about the issue since 2017 when a Montgomery County man named Louis Wilen alerted the agency. Wilen found SDAT was deducting other tax credits from the Homeowners’ Tax Credit, and year after year, people weren’t getting what they were owed.

“We took a deliberative approach to this and I apologize for that,” said Higgs. “It probably should’ve been more alarm bells going off and ‘let’s fix it right away.’

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While the calculation error has now been adjusted, lawmakers asked Higgs why SDAT decided that no refunds will be given. The audit found in 2019, people were shorted $4.4 million in Montgomery County and Baltimore City.

“There are taxpaying residents of the state who were, pardon my French, screwed over,” said Kramer.

“I don’t get the, ‘OK now that we know that we’ve messed up, tough luck,’ it’s really a bad attitude,” said Sen. Cheryl Kagen (D-Montgomery Co.).

Higgs said lawmakers will have to provide refunds through legislation. Those efforts are already underway.

Del. Al Carr (D-Montgomery Co.) provided FOX 5 a draft of the bill he’s written that would give impacted homeowners three years of compensation. In Montgomery Co., those affected could get a few thousand dollars.

Mary Knight, who lives in Kensington and cares for her elderly mother, would be one of them.

“We all need some good news,” said Knight. “That is good news.”

Knight said she could use that money for things like home repairs she’s had to put off.

After FOX 5’s initial report, Knight emailed SDAT to inquire about a refund and was told it wouldn’t happen.

“I really didn’t give it another thought,” said Knight. “So thank you. Thank you for following up on this.”

Carr said he expects his bill will be heard in committee soon after the General Assembly convenes next month.

SDAT has maintained it never made a calculation error and that the agency properly followed advice of legal counsel over the years.

“Our reading of the law says this was not an error on SDATs part, but it was a change in policy,” said Higgs.

Higgs has refused an interview with FOX 5.

Gov. Larry Hogan told FOX 5 in October that he wanted to get to the bottom of the issue and meet with SDAT and other officials.

FOX 5 asked Tuesday if Hogan had met with officials and whether he agreed with SDAT’s decision not to refund taxpayers.

“The governor received an update from the agency that it has resolved this problem inherited from previous administrations,” replied spokesman Mike Ricci in an email.