Maine income tax returns saw a number of changes for the 2013 tax year, including a major revision to the state’s property tax refund program. In the past, taxpayers needed to file for the property tax and rent “circuitbreaker” relief on a separate application from their income tax return. For 2013 and later years, that program has been replaced by the Property Tax Fairness Credit. Certain Maine taxpayers are now able to claim a credit on their state income tax return for a portion of their property taxes or rent paid.
Under the new rules, taxpayers who are Maine residents for at least part of the year and who lived in a home in Maine that they owned or rented can qualify for the credit if they had a Maine adjusted gross income of $40,000 or less and paid more than 40% of their Maine adjusted gross on rent or more than 10% of it on property taxes.
For a taxpayer with a Maine adjusted gross income of $40,000, the credit would likely be available if their property taxes were more than $4,000 a year or their rent was more than $1,250. This means that the taxpayers most at-risk for overlooking this credit are retirees who have social security or pension income that gets reduced or ignored for figuring Maine income, but may still have a high rent or property tax burden. This credit is generally not available for taxpayers in subsidized housing, unless they also received social security disability income.
This credit is new and hasn’t received a lot of press, so it’s fairly easy to overlook. Taxpayers who are worried that they might have missed out on this credit should double-check their Maine returns, especially since up to $400 of the credit may be refundable. That means that the taxpayer may get that much back, even if he or she had no Maine tax withheld during the year.
The Maine Revenue service has a page about the property tax fairness credit, and the worksheet used to calculate it is available on the Maine Revenue Service website.