The state of Maine is excellent for lobster, but what about income taxes? It's tax time, and residents are starting to organize and plan filing returns. The rules and regulations this tax year will go a long way in helping file your individual state and federal tax return.
Who Must File Maine Income Taxes?
If a taxpayer is a full-year resident, they must file a state tax return with the Maine Revenue Services (MRS). Not being domiciled in Maine but owning a residence also qualifies you as a Maine resident for income tax. Spending more than 183 days requires filing an individual income tax return.
The exception is if they are a “Safe Harbor.” This means that the individual didn’t have a permanent abode in Maine and had a permanent abode outside of Maine for the entire taxable year. It also means that the individual didn't spend any more than an aggregate of 30 days in Maine during the taxable year.
If you serve in the military, your home of record is your legal residence.
Being domiciled in Maine requires you to pay state income taxes to Maine even if you’ve been living out of state for a while.
What Are the Forms to Use?
You'll need to be aware of a couple of tax forms. Residents are required to file individual income tax on Form 1040ME. If you have filed an extension, you will need to use the extension payment voucher Form 1040EXT-ME.
What Is the Tax Rate in Maine?
Maine has a progressive tax rate. It’s, therefore, based on income.
Individual tax rates for taxable income:
- Up to $22,450: 5.8 percent of Maine taxable income
- $22,451 to $53,150: $1,302 plus 6.75 percent of the excess over $22,450
- $53,150 or more: $3,374 plus 7.15 percent over $53,150
There is a different tax rate for unmarried or legally separated people who qualify as heads of household for taxable income.
- Up to $33,650: 5.8 percent of Maine taxable income
- $33,651 to $79,750: $1,952 plus 6.75 percent of excess over $33,650
- $79,751 or more: $5,064 plus 7.15 percent of excess over $79,750
Married individuals and surviving spouses filing joint returns taxable income:
- Up to $44,950: 5.8 percent
- $44,951 to $106,350: $2,607 plus 6.75 percent over $44,950
- $106,351 or more: $6,752 plus 7.15 percent of excess over $106,350
So, if you make $50,000, and file jointly, you pay the flat $2,607 and you'll have to pay 6.75 percent on the difference from $44,950.
What Are the Filing Deadline and Extension Process?
The Maine state tax filing deadline is April 19, 2022. But if you are having difficulty completing your tax return, an extension may be requested. With an extension, your filing isn't due until Oct. 17, 2022.
But even if there is an extension to file your taxes, payment still must be made by the original due date, April 19. If you don't pay the taxes owed by this due date, you will owe late penalties and interest.
What Are the Penalties for Late filing and Underpayment of Taxes?
There is a late filing penalty of $25 or 10 percent of the tax, whichever is greater. But if a return is not filed upon demand, that penalty jumps to 25 percent of the tax due or $25. This is also based on which is greater.
The late payment interest fee is six percent on taxes not paid compounded monthly. There is also a late payment penalty of 1 percent to a maximum of 25 percent per month.
Where Do I Mail/E-file My Maine Return?
If you want to mail in your state income tax return, there are several addresses you'll need to be aware of. An individual income tax return with an enclosed check or money order is sent to Maine Revenue Services P.O. Box 1067 Augusta, ME 04332-1067.
Mailing an individual return with the expectation of a refund goes to Maine Revenue Services P.O. Box 1066 Augusta, ME 4332-1066.
You can also e-file using Maine FastFile. Find a trustworthy tax professional to e-file. Most tax professionals already do, but make sure you ask.
There’s also Maine i-File, which is free to Maine taxpayers. There are several advantages to using it. For instance, it's convenient, and submitted information is saved for future reference. You can also direct deposit any refunds through i-File.
How Do I Pay Taxes Due?
You can use the online EZ Pay System to make payments. These can be made directly from a savings or checking account or with a credit card.
A check or money order can be mailed in.
If you are unable to pay your taxes, you can apply for a payment plan. File by the income tax due date and pay what you can. Because there will be penalties and interest charged for late payment, it's always best to pay what you can upfront.
Call MRS at 207-621-4300 or 800-987-7735 to discuss options. A credit or debit card payment can also be made over the phone.
When asking for a payment plan over the phone, be prepared to say a dollar amount you can pay each month. A down payment will be requested if you provide one; the first payment will be due 30 days after the payment plan has been approved.
But if you don’t have a down payment, the first payment will be due in two weeks. You want to select a short timeframe to pay your taxes off to save interest charges and penalty accrual. Obtaining a loan from a financial institution may be a less expensive route to take.
Keep in mind that staying in contact with an MRS representative during the payment process is important.
Where Can I Check My Maine Refund Status?
If you e-filed your tax return, your tax refund can take four to six weeks. If you haven't received it by then, go to MRS refund status information online and check. You will need your Social Security number, filing status and refund amount (enter in whole numbers, don’t add the cents).
If you can’t find any helpful information online, then call Main Revenue Services at 207-624-9784.
What About Maine Taxes if You’re Self-employed?
Self-employed individuals are expected to report income on their personal income tax returns. They are not subject to corporate taxes.
What About Maine Taxes if You’re a Business?
Maine’s corporate income tax rate is
- greater than zero but not over $350,000: 3.5 percent of adjusted federal taxable income
- greater than $350,000 but not over $1,050,000: $12,250 plus 7.93 percent of the excess over $350,000
- greater than $1,050,000 but not over $3,500,000: $67,760 plus 8.33 percent of the excess over $1,050,000
- greater than $3,500,000: $271,845 plus 8.93 percent of the excess over $3,500,000
S-corporations and partnerships are pass-through entities. They are not subject to corporate income taxes. But if they have a Maine source of income and members who aren't residents, they may need to file Form 941P. These entities might also be required to withhold income tax or obtain an exemption. They also might elect to file a composite return on behalf of the nonresident members.
Rates and dates in this article are correct as of publication. But check for any changes at Maine Revenue Services before you file.
- Department of Administrative and Financial Services Maine Revenue Services: Individual Income Tax FAQ
- Department of Administrative and Financial Services Maine Revenue Services: Residency “Safe Harbors”
- Department of Administrative and Financial Services Maine Revenue Services: Forms 1099G and 1099-INT FAQ
- Department of Administrative and Financial Services Maine Revenue Services: Individual Income Tax Forms - 2022
- Department of Administrative and Financial Services Maine Revenue Services: State of Maine – Individual Income Tax 2021 Rates
- eFile: Maine Income Taxes and ME State Tax Forms
- eFile: Maine Income Taxes and ME State Forms
- Department of Administrative and Financial Services Maine Revenue Services: Welcome to Maine FastFile
- Department of Administrative and Financial Services Maine Revenue Services: Mailing Addresses for Forms and Applications
- Maine Revenue Services: EZ Pay Internet Payment
- Department of Administrative and Financial Services Maine Revenue Services: Electronic Services
- Department of Administrative and Financial Services Maine Revenue Services: Maine Revenue Services Payment Plans
- Department of Administrative and Financial Services Maine Revenue Services: 1040 FastFile FAQ
- Main Revenue Services: Refund Status Information
- Department of Administrative and Financial Services Maine Revenue Services: Corporate Income Tax FAQ
- Department of Administrative and Financial Services Maine Revenue Services: Pass-through Entity Withholding FAQ
Anne attended University of Akron and went on to have a career in television sales. Working as a commercial property and casualty insurance agent for nine years allowed her to learn about different businesses' needs. She has also owned an advertising agency where she created marketing capaigns for various clients. Anne has written for several publications. She currently resides in Charleston, SC.