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Category: Maine

Maine Subtractions from Income

U.S. Government Bond Interest

Enter your income from direct obligations of the United States Government, such as Series EE and Series HH Savings bonds and U.S. Treasury bills and notes. Include on this line only the amount of interest included in your federal adjusted gross income.

State Bond Interest

Interest from Maine Municipal General Obligation & Private Activity Bonds and bonds issued by a Maine Airport Authority to the extent included in federal adjusted gross income. If included in your federal adjusted gross income you would enter this amount on the subtractions screen.

Premiums for Long-Term Care Insurance

Enter premiums paid for long-term care insurance if the insurance policy on which the premiums are paid,

  1. Meet the federal definition for a long-term care insurance contract (IRC § 7702B(b)) (these are long-term care premiums that generally qualify for federal itemized deductions), or
  2. Must be certified by the Maine Bureau of Insurance. Premiums claimed must be reduced by any premiums claimed as Maine itemized deductions and by any premiums included in the federal self-employed health insurance deduction claimed on federal Form 1040, line 29.

Pre-taxed State Retirement System Pickup Contributions

Make this entry only if you retired after 1988 and are receiving retirement benefits from the Maine Public Employees Retirement Systems (MePERS). Subtract the amount in box 14 from the amount in box 2a on Form 1099-R issued by MePERS. Also enter on this line MePERS rollover amounts previously taxed by the state, whether or not included in federal adjusted gross income

Qualified Tuition Program Contributions

Enter up to $250, per beneficiary, of contributions made to a Maine or non-Maine qualified state tuition program (“529 college savings plan”) only if your federal adjusted gross income is not more than $100,000 if single or married filing separately or $200,000 if married filing joint or head of household.

Fiduciary Adjustment

If applicable, enter your share of a fiduciary adjustment (subtraction modifications) relating to income from an estate or trust (36 M.R.S.A. § 5122(3)). Attach a copy of your federal Schedule K-1.

Pension Income Deduction

Enter the pension income deduction from the Worksheet located on Page 14, line 8 from the Maine Individual Income Tax Booklet. Include copies of your 1099 forms to verify the subtraction. Note: Do not enter pension from Social Security benefits or Railroad Retirement benefits (tier 1 and tier 2) on this line.

Other Maine Subtractions from Income

Unless specifically stated, DO NOT enter non-Maine income on this line. Enter ONLY items specifically listed below. Note: Maine net operating loss carryover deductions are not allowed for tax years beginning in 2009, 2010 and 2011.
List the source of each amount claimed in the space provided and attach supporting documentation when claiming an amount on this line. Enter only amounts included in federal adjusted gross income. Enter in this section:

  • military compensation received by a nonresident servicemember
  • military annuity payments made to a survivor of a deceased member of the military as a result of service in the active or reserve components of the U.S. armed services under a survivor benefit plan or reserve component survivor benefit plan in accordance with 10 USC, Chapter 73.
  • recovery amounts included on federal Form 1040, line 21 related to items
    previously deducted on your federal return but not on your Maine return
    in an earlier year, such as real estate taxes
  • discharge of indebtedness amounts included in federal adjusted gross income deferred for federal tax
    purposes but not Maine tax purposes during 2009 or 2010
  • the amount of loan payments made by employers included in federal adjusted gross
    income of individuals qualified for the opportunity Maine credit
  • the amount of the reduction in your salaries and wages expense deduction directly related to claiming the federal Work Opportunity Credit or Empowerment Zone Credit reported on federal Form 5884, line 2 or federal Form 8844, line 2 (owners of pass-through entities, enter your share of the amount from line 3 of these forms to the extent not included on line 2). Note: do not enter wage amounts from Form 8844 related to the federal Renewal Community credit
  • settlement payments received by Holocaust victims that are included in federal adjusted gross income
  • account proceeds from a Family Development Account administered by FAME
  • earnings from fishing operations contributed to a capital construction fund
  • the amount of military retirement benefits not included in the pension income deduction on line 2d received by certain licensed dentists who practice an average of 20 hours or more per week in Maine and accept patients who receive MaineCare benefits
  • income from investments in the Northern Maine Transmission Corporation
  • up to $750 of property tax benefits provided by municipalities to senior citizens pursuant to 36 MRSA §6232(1-A) to the extent included in federal adjusted gross income
  • interest income and capital gains from the sale of bonds issued relative to the Maine Waste Management & Recycling Program to the extent included in federal adjusted gross income
  • all items of income, gain, interest, dividends, royalties and other items of income of a financial institution subject to the Maine franchise tax that are included in your federal adjusted gross income due to an ownership share in the financial institution that is a partnership, S corporation, or entity disregarded as separate from its owner
  • the total of capital gains and ordinary income resulting from depreciation recapture pursuant to Code sections 1245 and 1250 realized on the sale of multifamily affordable housing property certified by the Maine State Housing Authority. A copy of the MSHA certificate must be attached to the return.

For additional information, please refer to the Maine Individual Income Tax Booklet.