Maine has made the following changes to the 2020 Tax Year
Reporting use tax on income tax return
For tax years beginning on or after January 1, 2020, the requirement that a tax table be used to calculate
use tax reportable on individual income tax returns is repealed.
Earned income credit
The Maine earned income credit is increased from 5% to 12% of the federal earned income tax credit (25% for eligible individuals who do not have a qualifying child). The credit is also extended to individuals who are 18 to 24 years of age, have no qualifying children, and are otherwise qualified for the federal earned income tax credit.
Beginning in tax year 2020, the standard deduction for Maine filers, will be equivalent to the standard deduction taken on your federal return. This deduction may be subject to a phase-out, contingent on your income. The worksheet for the standard deduction phase-out can be found, here.
Earnings on a 529 plan
For tax years beginning on or after January 1, 2020, earnings on funds held in a qualified Achieving a Better Life Experience (ABLE) account are deductible in from your Maine taxable income.
Student loan payment subtraction for health care employees
For tax years beginning on or after January 1, 2020, a qualified health care employee (generally, an individual who is licensed as a registered nurse, practical nurse, osteopathic physician, or to practice medicine or surgery and is employed by a hospital in Maine) may claim, to the extent included in the employee’s federal adjusted gross income, the income subtraction modification for student loan payments made by an employer directly to the lender.
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