Income Modiﬁcations - Other Additions
Income and deductions are generally treated the same for Maine tax purposes as treated for federal tax purposes. However, certain federal and state laws may require different tax treatment of these items. These differences require adjustments, or modiﬁcations, to federal income to calculate Maine taxable income. See Form 1040ME, Schedule 1.
Addition modiﬁcations are required for items of income that are not included in federal income but are subject to Maine individual income tax or to reverse a federal deduction not allowed for Maine tax purposes.
Adjustment for loss, deductions and other expenses of a pass-through entity ﬁnancial institution subject to Maine franchise tax. Under Maine law, ﬁnancial institutions are subject to the Maine franchise tax, regardless of how the institution is organized. This includes a ﬁnancial institution organized as a pass-through entity, such as a partnership or limited liability company. Maine law provides that the income from an ownership share in a pass through entity ﬁnancial institution is not taxable income on the owner’s Maine income tax return. In like manner, any loss, deduction or expense of a pass-through entity ﬁnancial institution reﬂected in an owner’s federal income is not permitted in calculating the Maine taxable income of the owner. (36 M.R.S. § 5122(1)(K)).
Enter on this line any loss, deduction and expense included in the calculation of your federal adjusted gross income that is associated with an ownership share in a pass-through entity ﬁnancial institution subject to the Maine franchise tax.
Maine ﬁshery infrastructure investment adjustment. Maine taxpayers who claim the Maine ﬁshery infrastructure investment tax credit under 36 M.R.S. 5216-D who also deducted an amount included in the base for the credit on their federal tax return must increase Maine taxable income by the amount federal income was reduced. 36 M.R.S. §§ 5122(1)(GG) and 5216-D).
Enter on this line the amount of any expense or deduction, including itemized deductions, claimed for federal income tax purposes that is used to calculate the Maine ﬁshery investment tax credit claimed for the taxable year.
Wellness programs tax credit adjustment. Maine taxpayers who claim the Maine credit for wellness programs under 36 M.R.S. § 5219-FF and deducted related expenses on their federal tax return must increase Maine taxable income by the amount federal income was reduced. Applies to tax years beginning on or after January 1, 2014. (36 M.R.S. § 5122(1)(EE)).
Enter on this line the amount of any deduction (such as depreciation and expenses) claimed for federal income tax purposes that is used to calculate the wellness programs tax credit claimed for the taxable year.