Maine tax deductions and write-offs (2026)

No. Maine fully exempts military retired pay from state income tax. Other retirement income: Each taxpayer may deduct up to $48,216 (2025) of pension, 401(k), and IRA income, reduced by Social Security and railroad retirement benefits received. The deduction phases out above AGI of $125,000 single / $250,000 joint.

Partly. Each taxpayer may deduct up to $48,216 (2025) of pension, 401(k), and IRA income, reduced by Social Security and railroad retirement benefits received. The deduction phases out above AGI of $125,000 single / $250,000 joint. the 2025 official amount is shown.

No. Maine subtracts all Social Security benefits included in federal AGI. Social Security received (taxable or not) reduces Maine's separate pension income deduction dollar for dollar ($48,216 cap per person for 2025). Military retirement pay is not affected by this reduction.

Yes: Maine offers the Maine Earned Income Credit, 25% of the federal EITC with qualifying children; 50% without qualifying children (refundable). ITIN filers eligible; workers without children eligible from age 18. Refundable for residents and part-year residents only; for nonresidents it can only reduce tax owed.

Only instead of income tax: itemizers in Maine pick sales tax (5.5% state rate, about 5.5% with local taxes) or state income tax, whichever is bigger. A 5.5% general rate with no local sales taxes; higher rates apply to prepared food (8%), lodging (9%), and short-term auto rentals (10%).

Yes on your federal return if you itemize, within the $40,400 SALT cap. Maine adds its own break: Refundable Property Tax Fairness Credit up to $1,000 ($2,000 if 65+) for homeowners and renters on Form 1040ME.

Yes: Maine offers the Property Tax Fairness Credit. Refundable credit for renters and homeowners whose rent or property tax is high relative to income, up to $1,000 ($2,000 if 65+, and up to $2,000 for certain joint or head-of-household filers with dependents); claimed on Schedule PTFC/STFC with Form 1040ME. Maine resident; rent paid must exceed 26.67% of total income; income limits vary by filing status and number of dependents (under $102,500 if 65+); married filing separately cannot claim.

Partly: Maine's motor vehicle excise tax is based on your vehicle's value, so it's deductible as personal property tax if you itemize. Excise is MSRP times a mill rate that drops from 24 mills in year 1 to 4 mills from year 6 on; the town keeps the revenue.

Maine taxes income up to 7.15% and has a property tax fairness credit for renters and homeowners.

Yes on your Maine return: $1,000 per beneficiary per return; federal AGI <= $100k single / $200k joint. Contributions to any state's 529 plan count. Tax parity state since 2023; deduction unavailable above the AGI thresholds; any contributor (e.g., grandparents) can claim per beneficiary.

Yes: Dependent Exemption Tax Credit: roughly $315 per dependent for 2026 ($300 base, inflation-indexed; $305 in 2025), doubled to about $630 for each child under 6. Reduced by $20 per $500 of Maine AGI above $100,000 single, $125,000 head of household, or $150,000 joint. Refundable for residents and part-year residents.

Yes, as a business expense: Maine charges $175 to form an LLC; ongoing: $85 annual report. Due June 1; $50 late penalty.