Bill > LD229

This bill proposes significant changes to Maine's individual income tax rates and brackets, effective from tax year 2026. The legislation creates new tax rate tables for three filing categories: single individuals and married persons filing separately, heads of households, and married joint filers or surviving spouses. The new tables introduce more progressive tax brackets with additional tiers and slightly higher rates for higher income levels. For single filers and those married filing separately, the new structure introduces five tax brackets ranging from 5.8% for incomes under $41,600 to 8.2% for incomes over $500,000. Similar expansive multi-tier structures are created for heads of households and married joint filers, with progressively higher tax rates for increased income levels. The bill also includes a mechanism for annual cost-of-living adjustments to these tax brackets, using the Chained Consumer Price Index as the basis for calculation. These changes aim to create a more nuanced and potentially more equitable income tax system by introducing more gradual tax rate increases across different income levels, replacing the simpler three-tier system that was previously in place for tax years 2017-2025.

Budget and Finance

https://legislature.maine.gov/legis/bills/display_ps.asp?LD=229&snum=132