Income Tax Relief Coming For Some Frederick County Residents

It would cover ALICE households.

Frederick, Md. (KM) – Some income tax relief will be coming to about 80,000 Frederick County residents. On Tuesday, the County Council approved an income tax reduction for ALICE households. .

Chief Financial Officer Lori Depies says the county has a thriving economy’s. “But we do know that there are those still struggling in our county, and haven’t benefited by the thriving economy. There are all those who are struggling to live and work,” she says. “Specifically, our growing and aging senior population, and those households who are classified as ALICE, Asset Limited, Income Constrained, Employed.”

Frederick County’s income tax rate has been 2.96% since December 31st, 2000. State law at the time did not allow the county to set varying income tax rates for specific populations. But the General Assembly in 2021 approved legislation that allows the counties to apply their income tax rate on a bracket basis. Under the proposal for Frederick County, that rate would drop to 2.75%. This is part of the fiscal year 2023 county budget prepared by County Executive Jan Gardner.

Depies says Frederick County is the first jurisdiction  to use this new law. “Over 80,000 tax filers will see this rate reduction, or 60% of all tax filers in Frederick County,” she says. “This is specific and targeted tax relief to help our seniors, ALICE households, and many workers who make up the backbone of our society, including fire fighters, teachers and school system employees, restaurant workers, child care workers and many others.”

Under this plan, couples with annual taxable incomes  of $100,000 or less, and singles with a yearly taxable incomes  of $50,000 or less,  are eligible for this income tax break.

Ken Oldham, the President of the United Way of Frederick County, spoke to the Council about this proposal on Tuesday. “These are working families who are unable to afford basic cost of living in our community,” he said. “At United Way, our role in the community is to advocate on behalf of ALICE.”

The vote was 4-2 with Councilmen Phil Dacey and Steve McKay opposed. Dacey says he’s favors lower taxes, but is concerned about procedure. He says he would have preferred the Council wait until next week to take a vote on this proposal. “We usually have the hearing and then the next week we have the vote. I would like to prepare some amendments to this, put out them out there so the public can weigh in on whether or not this is the appropriate reduction in taxes or not,” Dacey said.

“We did tell you that this was going to be coming before us and that we would be making a decision tonight {Tues},” Council President MC Keegan-Ayer replied. “I believe this is part of the budget.”

Councilman McKay said he too supports  lowering taxes, and giving some of the county’s money back to the taxpayers. But he said the County needs to do more. “I completely agree with the structure of this in terms of orienting the cut towards to those who need it more. The thresholds were very similar to what I was contemplating. I was just contemplating doing so much more,” he says.

In her comments, Councilwoman Jessica Fitzwater said she’s pleased the County Executive put this tax decrease in her budget. “This been described as targeted tax relief which it absolutely is, and it is the right time to provide this income tax relief to our working families and our working folks in the county,” she said.

This income tax decrease is scheduled to go into affect on January 1st, 2023.

By Kevin McManus