Maine has made the following changes to the 2024 Tax Year
Lincoln Mill Facilities District bond interest
- Certain bonds issued by the Lincoln Mill Facilities District are, together with interest on and income from the bonds, exempt from all taxes, including the Maine income tax. Effective April 16, 2024.
Pension income deduction
- Beginning tax year 2024, the pension income deduction is increased to the maximum
annual benefit that an individual eligible to retire at the retirement age,
as defined in 42 United States Code, Section 416(l), as of January 1st
of the tax year may receive under the federal Social Security Act and
amendments to that Act as of June 28, 2023. Benefits received under a
military retirement plan, including survivor benefits, continue to be fully
exempt from Maine income tax.
United States Space Force
- The law is amended to include the Space Force as an active or reserve component of the United States Armed Forces for purposes of the Maine pension income deduction and the income subtraction modifications for annuity payments made to the survivor of a deceased member of the military and non-Maine active duty military pay.
Installment sale election
- Beginning in tax year 2024, the law provides that interest associated with an installment sale of property for which the election is made by a nonresident individual taxpayer to pay the Maine tax on the gain in the year of the sale or in a subsequent tax year is excluded from Maine taxable income in the year of the election and any subsequent tax year.
Credit for certain homestead modifications
- Beginning in tax year 2024, the credit for certain homestead modifications is repealed except that unused credit amounts may be utilized to the fullest extent allowed by the carryforward provisions for the credit.
Dependent exemption tax credit
- Beginning in tax year 2024, the dependent exemption tax credit is refundable and for tax years beginning after 2024, the credit is adjusted for inflation. The credit is subject to phaseout.
Estimated income tax payments; short taxable year
- The law is amended to clarify that the payment of estimated income tax payments for a short taxable year must be made in accordance with existing due dates for estimated tax installments that fall within the short taxable year.
Property tax fairness credit
- Beginning in tax year 2024, the property tax fairness credit is increased for individuals 65 years of age or older by 1) increasing the maximum benefit base to $4,000, regardless of the individual's filing status and number of qualifying children and other dependents, and 2) increasing the maximum benefit from $1,500 to $2,000.
Information returns
- The law is amended to clarify that certain returns of
information are required to be filed by persons making payment or
crediting in a calendar year the amounts of $600 or more, or $10 or more
in the case of interest or dividends, to a person who may be subject
to Maine income taxes. Failure to file such returns, or filing a false or
fraudulent return, may result in a penalty of $50 for each such failure.
Generally, returns of information include Forms W-2, Forms 1099, and
other similar forms containing tax information necessary for filing Maine
income tax returns.
For more details, click here.