Maine ~ Corporate, Personal Income Taxes: Various Income Tax Changes Enacted

CCH Tax Day Report

Recently enacted Maine legislation makes numerous changes to corporate and personal income taxes, including the enactment of new credits.

Disability Income Protection Plan Credit

The legislation enacts a credit for disability income protection plans in the workplace. A qualified employer can take a tax credit beginning on January 1, 2017, for either a qualified short-term disability income protection plan or a qualified long-term disability income protection plan. The credit is limited to $30 per employee enrolled after January 1, 2017 in such a plan, and can be taken for no more than three consecutive tax years. The credit cannot exceed the tax due or be carried back or forward.

Adjustments to Federal AGI

The amount claimed as a deduction in determining federal adjusted gross income related to a taxpayer’s expenses for a qualified long-term disability income protection plan or qualified short-term disability income protection plan during the taxable year for which a credit is claimed under section 5219-NN for that taxable year will no longer need to be added back to the federal adjusted gross income amount reported for personal income tax.

Adjustments to Federal AMT

In determining Maine tentative alternative minimum taxable income, federal alternative minimum taxable income will no longer be adjusted by a reduction in the amount of federal itemized deductions included in the base for calculating the credit under section 5218-A.

Credit for Homestead Modifications

Also enacted is a credit for modifications to an existing homestead that make it accessible to homestead residents that have a disability or physical hardship. The credit is limited to $9,000 and is available for individuals with a federal gross adjusted income that does not exceed $55,000.

Property Tax Fairness Credit.

Married individuals filing separate returns will no longer qualify for the property tax fairness credit.

Change in Automatic Filing Extension

The legislation repeals the additional 30-day extension of the filing deadline given to corporations or certain financial institutions that receive a federal extension.

Filing Date for Franchise Tax Returns

The time for filing franchise tax returns will be due the 15th day of the fourth month after the end of a financial institution’s fiscal year. Currently, the return is due by the 15th day of the third month.

Filing Date for Information Returns

The filing deadline for information returns for payments of $600 or more will be January 31 of each year. Currently, the deadline is February 28.

Refund Set-Offs

Court-ordered restitution obligations will be second in priority in set-offs for government agencies against refunds. Liquidated child support debts are first priority.

Business Disclosures for Public Subsidies

The business disclosures associated with eligibility for public subsidies and incentives are repealed.

Interest rate changes (TAXDAY, 2017/06/19, S.13) and sales and use tax changes (TAXDAY, 2017/06/19, S.15) enacted by the legislation are reported separately.

L.D. 1551 (H.P. 1069), Laws 2017, effective 90 days after adjournment

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