If you recall, last month I began my series of columns on the various investments the Committee on Appropriation and Financial Affairs and the Legislature have made in Maine. For education, we created the Education Rainy Day Fund, made two years of community college education free, and froze tuition at the University of Maine. In this column, I want to talk about another important investment: tax relief. With historic inflation driving up the cost of gas, groceries, homes and rent, tax relief is more important than ever. We know people are feeling pain in their wallets, but help is out there.
First, the budget provided tax relief to retired residents of Maine. It increases the annual pension income tax deduction to $25,000 for all retired Maine residents. This includes annual increases of $5,000 until it reaches $35,000. Previously, Maine retirees could only deduct $10,000 from their income taxes. In other words, the maximum deduction will more than triple over three years, making a real difference to Mainers who have worked hard all their lives and deserve to enjoy the benefits and benefits of an earned retirement.
Second, we continued to provide property tax relief to working families and seniors in Maine. The budget permanently expands the Property Tax Equity Credit to provide eligible working families and older Mainers with much-needed property or rent tax relief. The maximum benefit is $1,000 per year for those under 65 and $1,500 for those over 65. It is estimated that 100,000 homeowners and tenants will benefit from this change. Among other criteria, you will need to file a 2021 Maine Personal Income Tax Return (Form 1040 ME) and attach PTFC/STFAC to become eligible. For assistance completing these forms, please contact Maine Revenue Services at (207) 624-9784 weekdays from 9 a.m. to 12 p.m. You can also send an e-mail to [email protected] Low-to-moderate income Mainers can contact CA$H Maine for assistance in completing tax forms. Please visit www.cashmaine.org or call 2-1-1 for assistance.
Finally, the budget provided tax credits for working families. It increased the state earned income tax credit from 25% to 50% of the federal earned income tax credit for eligible individuals without children. The increased state earned income tax credit doubles from 12% to 25% of the federal earned income tax credit, for all other eligible individuals. For those unaware, the Earned Income Tax Credit (EITC) helps low-to-moderate income workers and families reduce the taxes they owe and even increase the refund they get. If your family earns less than $57,414 a year, you could get a total benefit of, on average, $764. To learn more about the EITC, please visit irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc. For assistance with the state earned income tax credit, please call Maine Tax Services at (207) 626-8475 weekdays from 9 a.m. to noon.
While we’ve provided targeted tax relief to Mainers, we know we still have work to do. The tax relief keeps Mainers in Maine and helps attract people from afar. Hopefully the relief available now will help many people as we consider what we can do when we return to the next session.
I am deeply honored to represent you and your family at Augusta. If you have any questions or need assistance, please do not hesitate to contact me at [email protected] or (207) 287-1515. Hope you had a wonderful Memorial Day and are preparing for another one of our beautiful Maine summers.
Libby Library: A library with an ocean view