Bill > LD1294

This bill expands the dependent exemption tax credit in Maine by modifying the credit amount and phase-out provisions for tax years beginning on or after January 1, 2025. Currently, taxpayers can claim a $300 credit for each qualifying child and dependent, but starting in 2025, the credit will be differentiated by the age of the dependent: $300 for dependents 6 years and older, and $600 for dependents under 6 years old. The bill also changes the phase-out mechanism for the credit, which reduces the credit amount based on the taxpayer's Maine adjusted gross income. For the 2025 tax year and beyond, the credit will be reduced by $20 for every $500 of income above new thresholds that vary depending on the taxpayer's filing status: $100,000 for single or married filing separately, $125,000 for head of household, and $150,000 for married joint returns or surviving spouses. Additionally, the credit becomes fully refundable starting in the 2024 tax year, meaning taxpayers can receive the credit even if it exceeds their tax liability. These changes aim to provide more substantial tax relief for families with young children and adjust the credit's reduction based on income levels.

Budget and Finance

https://legislature.maine.gov/legis/bills/display_ps.asp?LD=1294&snum=132