Program Limitations and Student Responsibilities
Several limitations and responsibilities relate to the Opportunity Maine program that all students should note. These include the following:
Does the existence of Opportunity Maine make it easier to obtain loans for students who are considered by federal loan law to be high risk borrowers?
No, it does not. The community colleges will not approve aid to students considered by federal loan law to be high risk borrowers just because they may later be able to claim the Opportunity Maine tax credit.
If I receive a state tax credit under this program, can that affect my federal tax liability?
Yes, it can. Receipt of a state tax credit usually increases a person’s federal tax liability.
If I fulfill all my graduation, residency and paperwork obligations, is my tax credit guaranteed?
Not necessarily. Opportunity Maine is based on a statute, and statutes can always be amended or even repealed by the Maine Legislature, especially when a statute, like Opportunity Maine, implicates the provision of the Maine Constitution requiring that the Legislature “shall never, in any manner, suspend” the power of taxation.
Is there any penalty for me breaking my obligations under the contract?
Yes, there can be. If you claim and/or receive the tax credit when in fact you violated one of the obligations or limitations imposed by law on your participation in this program, you could be subject to the penalties that apply under 36 MRSA §5333 or other provision of Maine law governing false tax filings.
If I can afford college without using loans, should I take the loans anyway because I can get this tax credit?
No. As recommended by the American Association of Community Colleges , the MCCS recommends loans only for those students who absolutely cannot afford to pay by other sources. This is because loans in general create debt that can last for some time. Moreover, you may not stay in Maine after you graduate to access the tax credit, and/or the program may be amended or repealed by the time you claim your credit.
Calculating the amount I can claim as a credit is really complicated. Can my college do more to help me?
Unfortunately, no. Financial aid offices do not have all the information that you need, and they do not have the resources to collect it for you. In addition, the law effectively requires you, your various lenders, and other governmental agencies to be involved. MCCS has attempted to simplify the process, especially the calculation part, and will continue to do so. Still, because of growing enrollments and budget constraints, MCCS does not have the financial or staffing resources necessary to do more at this time.
Are there any other limitations that apply?
Yes, the law imposes many, and you should research them all. For example, you may claim the credit only if you are a resident, and only for the amount of regular payments you made during the months in which you were working for an employer located in Maine. A married couple filing jointly under state law may claim the credit only to the extent that the spouse on whose behalf the credit is claimed meets these requirements.
Your credit may not reduce the tax otherwise due to less than zero. Taxpayers are entitled to the credit for any taxable year may carry over and apply to the tax liability for any one or more of the next succeeding 10 years the portion, as reduced from year to year, of any unused credits. More than one taxpayer may claim a credit based on loan payments actually made to a relevant lender or lenders to benefit a single opportunity program participant, but no two taxpayers may claim the credit based on the same payment.
Why are some of the answers here different from information that is available from other sources?
Opportunity Maine is a brand new law with many key provisions that require relatively significant interpretation. As a result, colleges, universities, students, parents, and advocacy groups are likely to have their own interpretations of the law. To implement this program at Maine’s seven community colleges, MCCS has attempted to adopt reasonable interpretations that recognize fairly both the benefits and burdens of this program so students can be as fully informed as possible.
A Reminder about Responsibility
Any student interested in Opportunity Maine has at all times the primary and exclusive responsibility for complying with all of the procedures in a complete, accurate, truthful, and timely manner. While MCCS is required by law to provide certain functions, the MCCS does not provide any service that should be construed as either legal or tax preparation advice. Legal responsibility for truthfully claiming this tax credit remains at all times with the student, and no student shall rely on any act of the MCCS without independently verifying the truth, accuracy, and/or completeness of any representation that a student makes to any official of a community college, the Secretary of State’s office, or Maine Revenue Services.