MONTGOMERY COUNTY, Md. — Thousands of Montgomery County residents could soon receive refunds in the mail thanks to a mistake made by the state’s assessments and taxation department.
In 2016, Montgomery County resident and retired programmer Louis Wilen wrote a program to calculate Maryland’s homeowner's tax credit.
In Maryland, that program provides homeowners credits against their property tax bill if the property taxes exceed a fixed percentage of their gross income. Homeowners are eligible to receive credits under the program if their combined gross household income is $60,000 or less.
Shortly after writing his program, Wilen said he noticed something was amiss with the state’s tax credit calculations.
“I wrote the program and my numbers weren't coming out the same as I expected,” he said.
Wilen said he spent hours trying to find a possible bug in his program, but he couldn’t. So, he contacted the Maryland Department of Assessments and Taxation Department, their lawyers, and even Montgomery County officials.
“It was kind of like, the more time I invested that, the harder I was going to work on it, you know?” he said.
Maryland’s Office of Legislative Audits eventually audited the assessments and taxation department in 2020 after Wilen reached out to them.
The audit found the department did not always calculate homeowners’ tax credits correctly and did not perform timely audits to help ensure the accuracy of those awarded credits.
“Resulting in an overpayment of property taxes by the applicable homeowners,” the audit read.
A new law, written by Montgomery County Delegate Al Carr and Montgomery County Senator Craig Zucker, was eventually passed that said the state would have to determine whether a homeowner is owed additional homeowners’ property tax credits for amounts paid during the taxable years between June 30, 2017, and July 1, 2021.
“We realized [the assessments and taxation department] were shortchanging Montgomery County and Baltimore City residents by tens of millions of dollars,” Zucker said in a September press conference.
Montgomery County Executive Marc Elrich says his county now must pay for the state’s mistake as residents there did not receive the refunds they should have gotten.
“Our refund is based on the state's calculation and so, if the state calculation is wrong, then our refund calculation was wrong,” he said. “And so, we didn't give back what we should have given back. We don't have any way of knowing because the data comes from the state, I think, in fact, it’s probably actually calculated by them. So, we just get stuck this way. So, it becomes our problem.”
But, Elrich said the county must do what is fair.
“We obviously collected the money, we obviously spent the money, and now we have to pay it back,” he said. “We didn't anticipate it, but we're going to do it.”
According to County Executive Elrich’s office, roughly 7,900 accounts in Montgomery County were affected between 2017 to 2019. The estimated total tax credit to be refunded from the county is expected to be more than $8 million.
Elrich said the county is waiting for assistance from the state, but refunds could go out as early as mid-December to January.
“It'll happen pretty soon,” he said. “People should either get a holiday gift, or a gift coming shortly after the holiday, to pay for the gifts that they give out during the holiday.”
Some people could receive around $1,000 back. However, the amount people get back will ultimately depend on their personal financial situations. Checks will also include a financial amount for multiple years of refunds a homeowner should have originally received.
Elrich added the refunds will not create a hole in this year’s budget, but the county will have $8 million less to work with next year.
“It is a blow because I can think of any number of really good things, I could do with that money that we're not going to be able to do,” he said. “I could add this money to childcare. I could add this money to climate change actions. There's lots of stuff I could do.”
Either way, Wilen said he was pleased he was able to affect change.
“I'm happy, although, with the state law that was passed, it only gave back three years’ worth of refunds,” he said.