Question 1

What is Maine's state income tax rate for 2025?

Accepted Answer

Maine imposes a 3-bracket progressive income tax under 36 MRSA §5111: 5.80% on single-filer income up to $26,800, 6.75% from $26,800 to $63,450, and 7.15% above $63,450. Married-filing-jointly thresholds roughly double to $53,600 and $126,900. Bracket thresholds are inflation-indexed annually per 36 MRSA §5403.

Question 2

What is Maine's standard deduction and personal exemption for 2025?

Accepted Answer

Maine's TY2025 standard deduction is $15,000 for single filers and $30,000 for married-filing-jointly under 36 MRSA §5124-C, with a personal exemption of $5,150 per filer and per dependent under 36 MRSA §5126-A. Both amounts are cost-of-living indexed annually per §5403 and phase out at higher income thresholds.

Question 3

Does Maine tax Social Security and retirement income?

Accepted Answer

Maine fully exempts Social Security benefits from state income tax. Under 36 MRSA §5122(2)(M-2), Maine allows a pension income deduction of up to $30,000 per taxpayer for TY2025 (up from $25,000 in TY2022, per LD 220 and LD 501), which applies to qualified retirement plan distributions including 401(k), 403(b), IRA, and defined-benefit pension income. Military pension income is separately fully exempt.

Question 4

Do Maine cities or towns charge a local income tax?

Accepted Answer

No. Maine does not authorize its municipalities to levy a local income tax. All personal income tax in Maine is collected at the state level under 36 MRSA Chapter 803, and municipal revenue is instead derived primarily from local property tax, which averages an effective 1.09% of home value statewide.

Question 5

What Maine-specific credits should filers know about for 2025?

Accepted Answer

Maine's Property Tax Fairness Credit under 36 MRSA §5219-KK is a refundable credit worth up to $1,000 for eligible households (up to $1,500 for filers age 65 or older) whose property tax or rent exceeds a defined percentage of household income. Maine also offers a refundable Earned Income Tax Credit at 25% of the federal EITC under 36 MRSA §5219-S, doubled from 12% by LD 220 in 2022.

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