Maine Revenue Services (MRS) has issued a Tax Alert indicating that Governor Paul LePage will propose legislation that would conform Maine’s income tax law to the federal American Taxpayer Relief Act of 2012 (ATR) to the extent that it impacts tax years beginning in 2012 and to the extent that Maine law does not already deviate from the ATR. Conformity to the federal tax law changes will require legislative action. Maine tax forms and instructions for 2012, which have already been issued, are consistent with the Governor’s proposal on 2012 tax conformity issues. Therefore, MRS advises taxpayers to file their 2012 tax returns as currently instructed. If final legislation is enacted that is not consistent with this advice, MRS will inform taxpayers of those tax items and describe what taxpayers will need to do in order to correctly file their 2012 tax returns or to correct returns already filed. Taxpayers who file on the basis of this advice will not be subject to penalties or interest associated with these tax items in the event that legislation is passed that does not conform to the federal 2012 tax law changes.
Under current law, Maine conforms to the federal Internal Revenue Code (IRC) through December 31, 2011, with some exceptions specifically contained in Maine income tax law. The Maine Legislature must review the changes made to the IRC since December 31, 2011, including the changes made in the ATR, to determine to what extent Maine will conform to the changes. The most notable provisions that impact Maine taxation beginning in 2012 are the above-the-line deduction of up to $250 for teacher classroom expenses, the expanded IRC §179 business expense deduction, and the extension and modification of the federal research credit impacting the corresponding Maine research credit. Other extended federal tax items that impact Maine taxation for the 2012 tax year include itemized deductions for mortgage insurance and related expenses, accelerated depreciation deductions for leasehold/restaurant/retail improvement property, special expensing rules for film and television productions, a deduction for contribution of food inventories, and a number of other miscellaneous items with a less significant impact on Maine taxes.
Maine Tax Alert, Maine Revenue Services, Vol. 23, No. 2, January 2013 , ¶200-703