New Computer System Could Recoup Lost Tax Revenue

SNOW HILL – A new computer tax system could recoup another $165,000 in tax revenue for Worcester County over four years by identifying improperly filed tax credits.

 “The comptroller’s office is hopeful there’ll be a substantial increase in revenues mostly from income tax,” Kathy Whited, Worcester County budget officer, informed the County Commissioners Tuesday.

The new state-mandated Modernized Integrated Tax System (MITS) will cost Worcester County $70,000, which will be spread out over four years of tax revenue and be paid for out of the additional taxes recovered through using the new MITS program.

Documents from the Maryland Comptroller’s Office called the change in computer system “mission critical.”

According to Whited, the new system will allow the county to better forecast and monitor income tax payments and add other functions the current system does not offer.

The new revenue will come from identifying incorrectly taken credits or underpayments through the improved tracking system.

“It will have more checks and balances in place to come back and say, no, sorry, you’re not eligible. I’m assuming that’s how it works,” Whited said.

According to documents from the Maryland Comptroller’s Office, the state anticipates increased collections in six areas.

If 1 percent of Marylanders are claiming incorrect withholding, and if the state can achieve a 60 percent collection rate in a year, the state could see an additional $9.6 million.

Up to 5 percent of those taking the childcare expense credit are not eligible for it, the Comptroller’s Office estimated, resulting in an additional $420,000 to the state.

One quarter of those taking federal tuition adjustments are probably not following the correct procedure in modifying their Maryland tax return, which could bring in another $2.2 million per year.

About 2 percent of those using the earned income credit are not eligible, says the Comptroller’s office, or are claiming the wrong amount, and the state anticipates recovering another $1.8 million when this is corrected.

Quality teacher incentive credits are another trouble spot, with up to 15 percent of those claiming the credit not entitled to it, which would garner an additional $1.2 million when corrected.