Maine has made the following changes to the 2022 Tax Year
COVID pandemic relief payment income subtraction modification
- For tax years 2022 and 2023, the amount of COVID pandemic relief payment received is deductible in calculating Maine taxable income, to the extent the payment is included in federal adjusted gross income.
Maine space corporation bond interest
- Certain bonds issued by the Maine Space Corporation are exempt from all taxes, including the Maine income tax. This included interest on and income from the bonds.
Pension income deduction
- The pension income deduction for non-military retirement plan benefits is increased from $10,000 to $25,000 for tax year 2022. The deduction will increase to $30,000 for tax year 2023 and $35,000 for tax years after January 1, 2024. Benefits received under a military retirement plan, including survivor benefits, continue to be fully exempt from Maine income tax.
FAME nonprofit student loan repayment program income subtraction modification
- Beginning in tax year 2022, an individual taxpayer may claim, to the extent included in federal adjusted gross income, the income subtraction modification for student loan payments made directly to a lender on behalf of the taxpayer by a student loan repayment program funded by a nonprofit foundation and administered by the Finance Authority of Maine for residents of the State employed by a business located in the State.
Educational opportunity tax credit income subtraction modification
- Beginning in tax year 2022, the income subtraction modification equal to eligible student loan payments made by employers on behalf of qualified employees in repealed.
Educational opportunity tax credit repealed
- The credit for educational opportunity, including any carryover of unused credit amounts from prior years, may not be claimed for tax years beginning with 2022. The credit, including carryover of unused credit amounts from prior years, is replaced by the student loan repayment tax credit available for tax years beginning with 2022 for qualified individuals.
Student loan repayment tax credit
- Beginning in tax year 2022, qualified individuals may claim the refundable student loan repayment tax credit (SLRTC). The SLRTC replaced the repealed educational opportunity tax credit (EOTC).
Earned income tax credit
- Beginning in tax year 2022, the Maine earned income tax credit is increased from 20% to 25% of the federal earned income tax credit (50% for eligible individuals who do not have a qualifying child).
Credit for rehabilitation of historic properties after 2007 - certified qualified rehabilitation expenditures
- The law extends the sunset date for making determinations on the eligibility of structures for the credit for rehabilitation of historic properties by five years. The definition of "certified qualified rehabilitation expenditure" is amended from December 31, 2025 to December 31, 2030. This is the date by which the United States Department of the Interior, National Park Service or the Maine Historic Preservation Commission must determine that a proposed rehabilitation of a structure meets the required standards for rehabilitation.
Property tax fairness credit
- Beginning in tax year 2022, the property tax fairness credit is increased to 100% of the benefit base that is greater than 5% (previously 5%) of the individual's income, up to $1,000 ($1,500 for individuals 65 years of age or older). Property tax amounts paid on the taxpayer's behalf during the tax year by the State to a municipality under the Property Tax Deferral Program may be included in the benefit base for purposes of calculating the property tax fairness credit.
Access to justice income tax credit
- The access to justice income tax credit is enacted to encourage attorneys to practice law in underserved areas of Maine. The court may certify up to five eligible attorneys each year from 2022 through 2027.
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