Maine State Income Tax: Rates and Who Pays in 2024

If you are earning more than $70k per annum in Maine state, then you are eligible to pay around $11,500 in taxes. If you are an inhabitant of Maine at any point during the financial year and have a taxable source of income, you are liable to file the Maine return. Income earned by every resident or non-resident in Maine is subjected to pay state income tax.

Rates generally range from 5.8% to 7.15%. Here’s everything you need to know about filing Maine State Income Tax, including the tax rates and who pays in the ongoing financial year. Use Beem to file your federal and State tax returns online at the best price for any filing status and types of tax forms across all 50 states.

Does Maine Have State Income Tax?

Yes, Maine has a state income tax and also a rule wherein all individuals who are working and earn state income have to pay state income tax. The tax rate generally varies from 5.8% to 7.15% for financial years after 2015. 

Maine State Income Tax – How much will the income after tax in Maine with Filing Status

Maine State Income Tax and Tax Bracket

The state income tax rates for 2022-2023 are as follows:

Individuals and married people filing single returns:

• > $24500, 5.8% of Maine’s taxable income
• $24,500 to $58,049, $1,421and add 6.75% of the amount over $24,500
• $58,050 or more, $3686, and add 7.15% of the amount over $58,050

Head of household:

• > $36,750: 5.8% of Maine’s taxable income 
• $36,750 to $87,099: $2,132 and add 6.75% of the amount over $36,750
• $87,100 or more: $5,531 and add 7.15% of the excess over $87,100

For married people who file joint returns:

• >$49,050: 5.8% of Maine’s taxable income
• $49,050 to $116,099: $2,845 and add6.75% of the amount over $49,050
• $116,100 or more: $7,371 and add7.15% of the amount over $116,100

Note: Tax brackets change from year to year. You should check present-day information.

What is Maine’s Standard Deduction?

As declared by Maine Revenue Services, the standard deduction in the state amounts for 2022 for single filings is $12,950, and for married people who file jointly, it is $25,900. For the tax year 2023, the standard deduction amounts have been updated and are as follows:

1. For single files: $13,850
2. For joint files: $27,700
3. For head of household: $20,800, and,
4. Married filing separately: $13,850

How to Calculate Maine State Income Tax?

You must know your taxing income and filing status to calculate Maine state income tax. Here are a few steps to calculate your state income tax:

Calculate your taxable income: To calculate your state taxable income, subtract deductions and exemptions from your total income.

Calculate your filing status: Head of household, single, joint, and married filing separately are the four statuses of filing. 

Use proper tax rate schedule: You can find tax rate schedules on the Maine Revenue Services website. It has three tax rate schedules based on filing status. 

Calculate your tax liability: To determine your tax liability, accumulate your taxable income by the rate of your tax filing status and income bracket, then add the tax for each bracket.

Subtract tax credits: Maine often offers many tax credits that reduce your tax liability.

Keep hold of taxes from your paycheck: Your employer retains money to cover your Maine tax liability. 

Do I Have to Pay Maine State Income Tax?

You are subjected to file a Maine return if you are a resident of Maine or you have taxable income from Maine. Here are a few situations where you are subjected to file an income tax return:

• If you are a non-resident and earn more than $3,000 by providing personal services.
• If you transfer somewhere else in the middle of the tax year. 
• If you are a non-resident but earn an income in Maine.

Whether you pay taxes or not depends on your residency and source of income.

Am I a Resident for Maine Income Tax Purposes?

Find out the number of days you are staying in Maine, your domicile status, and if you have a permanent home in Maine. These are the few things you look at to find out if you are a resident of Maine. Following are a few points to keep in mind:

• You are liable to pay taxes if you have stayed in Maine during the entire tax year.
• If you are a part-year resident of Maine during the tax year, you will be subjected to pay the tax for the income you earned during the period.

Resident Status Rules

Maine has certain rules to determine your residency for income tax purposes; here are a few points to determine:

1. If you stay in Maine for the whole year, you are liable to pay taxes for the whole year.
2. If you do not stay in Maine for the whole year but spend more than 183 days, you are a resident of Maine.

Part-year Resident Status Rules

If you are a part-year resident of Maine, you won’t live in Maine for that tax year and will not be a statutory resident. Here are some points to keep in mind:

1. As a part-year resident, you are liable to pay taxes on the taxable income you have earned while you were staying in Maine. 
2. If you start living in Maine in the middle of the tax year, you are a part resident of the country.
3. Part-year residents, safe harbor residents, and non-residents are liable to file a Maine return based on their federal adjusted gross income.

Non-Resident Status Rules

If you are a non-resident taxpayer in Maine, it means that you do not live in Maine but earn income in Maine. Here are a few key points to keep in mind:

• Even if you’re a non-resident, you are bound to file a Maine return with a taxable Maine income.

Where is My Maine State Income Tax Refund?

If you are wondering where is your Maine state income tax refund, there are several ways to find that out, some of which are listed below:

Maine Revenue Services Refund Status Look-Up: You can check the refund status by logging into the Maine Revenue Services Refund Status Look-Up page. Refunds are generally updated every Tuesday and Friday nights. To look up your refund status, you must enter your privacy details, such as your social security number, filing status, and the exact dollar refund amount shown on your tax return.

TurboTax: You can check the status of your refund on the TurboTax website.

Maine Revenue Services: You can call Maine Revenue Services directly on their toll-free number, i.e., 1-207-626-8475, to inquire about your refund status. 

Why Did My Maine State Income Tax Increase?

There could be many reasons for an increase in your state income tax; here are a few reasons:

Change in tax structure: Maine’s state and local taxes are bound to increase on a per capita basis by $471 from fiscal year 2021-2023.

Inflation: Maine officials are struggling with the increased costs due to the pandemic-driven inflation, differing from higher energy costs to increased prices of everyday items.

Tax reform proposals: Maine officials have debated tax reform proposals that would either raise taxes for the highest earners in Maine or phase out income taxes for everyone. 

Changes in Maine’s tax rates and tax brackets: Officials keep refining the state’s income tax rates and brackets. Maine has three tax brackets. 

Changes in state tax laws: Changes in state tax laws often impact your tax. 

Maine Sales Tax

Maine imposes a sales tax on retail sales of personal property and taxable services sold in Maine.

• It does not have any local sales taxes.
• The general sales tax rate is 5.5% in Maine.
• Maine Revenue Services provides online access to businesses to register for sales tax, file returns, and make payments. 

5 Things to Know About Maine Income Tax

Listed below are five things to know about Maine income tax:

Residency

Any income that is received as a resident of Maine is counted as Maine income. If you moved in or out of the state during the tax year, you are liable for filing returns. If anyone is not a resident of Maine but performs personal services for more than 12 days and earns more than $3000 of income is bound to file a Maine return.

Tax rates

Maine has an individual income tax varying from 5.80% to 7.15%. It also has a corporate income tax that varies from 3.50% to 8.93%. Maine also has a sales tax with a 5.50% rate.

Property taxes

The effective property tax rate in Maine is 1.28%, which, compared to other states, is above average. 

Withholding

Employers often withhold less than $18,000 for 12 months till June 30 of the previous year and are not required to file quarterly withholding returns.

Filing

Filing state income tax returns often need a separate return. If you have earned multiple incomes in different states, you may have to file more than one return.

Beem’s tax filing services are easy to use. You can file your taxes online regardless of your employment status and get assured maximum refund.

Frequently Asked Questions

Q. Is Maine a high-tax state?

Yes, Maine is a high-tax state with one of the highest tax burdens in the US. The state ranks third in the country, with New York and Hawaii at the top.

Q. Is Maine a tax-friendly state?

No, Maine is not a tax-friendly state, but it is also not the worst. Here are a few points to remember:

• Maine does not tax you for social security, but other retirement tax rates go as high as 7.15%
• There is no local tax in Maine, but the statewide tax rate is 5.5% 

Q. Is Maine a Good State for Taxes?

Here are some pros and cons of state taxes in Maine:

Pros:

• It does not tax social security income.
• Offers tax breaks for retirees, such as pensions up to $35,000
• No local sales tax

Cons:

• Has an above-average property tax, with a tax rate of up to 1.09%
• It is a high-tax state and has the third-highest burden in the city.

Q. How many of my paychecks go to taxes in Maine?

The number of paychecks that go into taxes in Maine depends on several factors, including:

• Your income level
• Filing status 
• Pre-tax deductions 

Q. Does Maine tax income earned in another state?

Yes, Maine taxes income earned in different states. If you are a resident of Maine at any point during the financial year and have a taxable source of income, you are liable to file the Maine return. If you are not a resident but perform social services in Maine for more than 12 days and earn more than $3,000 of income from Maine sources, you must file a Maine return.

Q. Does the state of Maine tax state social security income?

No, Maine does not tax the state of Maine’s social security income, but other forms of retirement income are taxed at 7.15%.

Q. Can Maine state income tax go up?

Yes, Maine state income tax can go up, and the state legislature has the authority to change tax rates and other aspects of the tax code.

Q. Do seniors have to pay state income tax in Maine?

No, Maine does not exempt seniors from paying state income taxes, although it does exempt social security income from paying taxes.

Q. Does Maine have state income tax for the military?

Yes, Maine does tax the military for the state income. But, there are exemptions and benefits allowed to military members. Here are a few listed:

• Pension and survivor benefits are exempted from taxes as of January 2016
• Maine residents serving out of the state are exempted from paying taxes against their salary.

Q. What are Maine state income taxes for LLCs?

Maine LLCs are liable to pay both state and federal taxes. Here are a few points to consider:

• LLC members must pay a 15.3% federal self-employment tax and a personal income state tax.
• All entities organized as corporations are liable to pay taxes rated up to 3.5%(with income up to $350,000) -8.93% (with income up to $3,500,000).
• Single-member LLCs are not subjected to paying taxes, but the member has to pay a personal state-level return that includes profit and losses.