2021 ProSeries/Maine Readme

Release 2021.350

Contents

Item addressed in this release

Items addressed in previous releases

What's new for ProSeries/Maine

Forms

Electronic filing

Additional Information

Items addressed in this release

The following has been updated and finalized since the previous release:

• Product Enhancements

Items addressed in previous releases

The following forms and worksheets were updated and finalized:

• Form 1040ME - Maine Individual Income Tax Form
• Schedule PTFC/STFC - Property Tax Fairness Credit / Sales Tax Fairness Credit
• Schedule CP - Voluntary Contributions and Purchase of Park Passes
• Schedule 1A - Income Addition Modifications
• Schedule 1S - Income Subtraction Modifications
• Schedule 1S - Worksheet for Pension Income Deduction
• Schedule 1S - Worksheet for Other Subtractions
• Schedule 2 - Itemized Deductions
• Schedule A - Adjustments to Tax
• Schedule A - Child Care Credit Worksheet
• Schedule A - Dependent Exemption Tax Credit Worksheet
• Schedule A - Earned Income Tax Credit Worksheet
• Schedule A - Adult Dependent Care Credit Worksheet
• Schedule A - Education Opportunity Tax Credit Worksheet
• Schedule A - Maine Minimum Tax Worksheet
• Schedule A - Other Tax Credits Worksheet

What's new for ProSeries/Maine

The following items are new for tax year 2021:

• Tax Rate Schedules: For tax year 2021, the top tax rate bracket threshold is: $53,150 for single filers and married persons filing separate returns; $79,750 for head of household filers; and, $106,350 for married taxpayers filing joint returns and surviving spouses.
• Standard Deduction: For tax year 2021, the Maine standard deduction amount is equal to $12,550 for individuals filing single and married persons filing separate returns; $18,800 for unmarried or legally separated individuals filing as heads of household; and $25,100 for married persons filing joint returns or surviving spouses.
• Standard/Itemized Deduction Phaseout: For tax year 2021, the value of the standard deduction or itemized deduction, whichever applies, begins to phaseout for taxpayers whose Maine adjusted gross income exceeds $83,850 for single individuals and married persons filing separate returns, $125,750 for individuals filing as heads of households, and $167,700 for individuals filing married joint returns or as a surviving spouse.
• Personal Exemption: For tax years beginning on or after January 1, 2021, the Maine personal exemption that may be claimed by the taxpayer is equal to $4,300 ($8,600 if married filing jointly). The exemption may not be claimed for a taxpayer or a taxpayer's spouse who is claimed as a dependent on another taxpayer's return. The personal exemption amount is subject to phaseout for taxpayers whose Maine adjusted gross income is more than $279,500 for single individuals; $307,450 for individuals filing as heads of household; $335,400 for individuals filing married joint returns or surviving spouses; or $167,700 for married individuals filing separate returns. The personal exemption and the phaseout amounts will be annually adjusted for inflation.
• Earned income tax credit: For tax years beginning in 2021, the Maine earned income tax credit has been amended. Additionally, the Maine earned income tax credit is extended to individuals who file a federal income tax return using a federal individual taxpayer identification number assigned by the Internal Revenue Service (IRS) on or before the due date for filing the return to the extent the taxpayer is otherwise qualified for the earned income tax credit.
• Property tax fairness credit: For tax years beginning in 2021, the maximum property tax fairness credit is increased to $1,000 ($1,500 for individuals 65 years of age or older).
• Maine COVID disaster relief payment income subtraction modification: For tax years beginningon or after January 1, 2021 but not later than December 31, 2022, the amount of Maine COVID disaster relief payment received is deductible in calculating Maine taxable income to the extent the payment is included in federal adjusted gross income.
• Loan Guarantee Program deferred interest income subtraction modification: Interest deferred or not charged on a loan issued under the Loan Guarantee Program established is exempt from all state taxes.
• Business meals deduction income addition modification: For tax years beginning on or after January 1, 2021, Maine taxable income must be increased by the amount of any increase in the business meals deduction allowed for federal income tax purposes pursuant to the federal Consolidated Appropriations Act,2021.
• Bonus depreciation income subtraction modification: An individual taxpayer may subtract an amount that was previously added back to federal taxable income by a corporation of which the taxpayer is a shareholder and by which, absent an S corporation election, the corporation could have reduced its federal taxable income for the taxable year relating to bonus depreciation.
• Net operating loss income addition/subtraction modifications: For tax years beginning on or after January 1, 2021, Maine conforms to the federal 80% taxable income limitation for net operating losses.
• Business interest deduction income subtraction modification: For tax years beginning on or after January 1,2021, the amount of business interest deduction previously disallowed for Maine tax purposes and required to be added-back may be recaptured, up to 25% per taxable year, to the extent that Maine taxable income is not reduced below zero and the amount has not been previously used to reduce Maine taxable income.
• Credit for biofuel commercial production: For tax years beginning on or after January 1, 2021, the nonrefundable tax credit for biofuel commercial production and commercial use is reinstated.
• Qualified Improvement Property (QIP) / Maine capital investmentcredit: QIP placed in service in Maine on or after January 1, 2021 may be included for purposes of calculating the Maine Capital Investment Credit. Previously, QIP placed in service after December 31, 2017 and before January 1, 2020, could not be included for purposes of calculating the Maine Capital Investment Credit.
• Credit for affordable housing: For tax years beginning on or after January 1, 2021, a taxpayer receiving a tax credit certificate for the taxable year from the Maine State Housing Authority for an affordable housing project located in Maine may claim a refundable income tax credit for that taxable year.
• Renewable chemicals tax credit: For tax years beginning on or after January 1, 2021, a taxpayer is eligible to claim a credit to reduce the Maine tax imposed on income derived during the taxable year from the production of renewable chemicals in Maine, to the extent Maine income tax is not reduced below zero. Any unused credit may be carried over for up to 10 taxable years.
• Credit for income taxes paid to other jurisdictions: For tax years beginning in 2021, a Maine resident who began teleworking in Maine due to the COVID-19 pandemic and who was performing the same services from a location outside of Maine immediately prior to the COVID-19 state of emergency declared by the Governor, or declared by the jurisdiction where the employee was performing the services, is allowed to claim the credit to the extent that 1) the services were performed during 2021 during the state of emergency period, 2) the other jurisdiction is asserting the income is sourced to that jurisdiction, and 3) the taxpayer does not qualify for an income tax credit in that jurisdiction for Maine income taxes paid as a result of the compensation.
• Centralized partnership audit adjustments: The Maine reporting and tax payment requirements related to federal partnership adjustments under the new federal centralized partnership audit rules are changed to include negative federal adjustments arising from Internal Revenue Service partnership audits and administrative adjustment requests filed with the Internal Revenue Service. A refund may be claimed directly by the partnership in lieu of a refund to the affected partners to the extent that negative adjustments exceed positive adjustments. The Maine reporting and tax payment requirements related to federal partnership adjustments under the new federal partnership audit rules also apply to a partnership that has filed an administrative adjustment request with the federal Internal Revenue Service.

Forms

Maine Revenue Services has approved for filing all forms and schedules included in this version of ProSeries/Maine.

Electronic filing

You can file returns electronically with this version of ProSeries/Maine.

For a list of forms that can be e-filed, first open a state return, and then go to What's New This Year in Help Center.

Additional information

Check all returns after printing

The Maine Department of Revenue scans computer-generated forms to quickly process the income tax returns they receive. To meet the requirements for producing computer-generated forms, ProSeries is required to limit the width of the tax information printed on forms that are scanned. In certain cases, data you entered may be truncated. After completing a tax return, review the information that prints (for example, mailing address information), make any necessary changes, and reprint the return before mailing it.

Returns that contain special formatting may be processed at a different location than manually-prepared returns. Therefore, the filing instructions that print with the state return may contain a mailing address that's different from the mailing address in the package that is sent to taxpayers. Be sure to have your clients mail their returns to the address in the filing instructions that print with the return.

End of ReadMe file for ProSeries/Maine