Bill > LD1622

This bill modifies Maine's state income tax laws to provide additional tax exemptions and deductions for certain types of income, with changes taking effect in different phases. For tax years from 2016 to 2025, the bill continues existing provisions allowing reductions for retirement plan benefits, with specific definitions for terms like "employee retirement plan" and "individual retirement account" and a gradually increasing "pension deduction amount" that peaks at the maximum annual Social Security benefit as of June 28, 2023. Starting January 1, 2026, the bill introduces two new significant tax exemptions: first, a complete exemption for tip income (defined as in existing labor law), and second, a complete exemption for overtime pay (defined as income paid in accordance with specific labor regulations). The retirement plan benefit reduction provisions are also slightly modified for this period, with the "pension deduction amount" changing to mean the annual benefit an individual receives from an employee retirement plan. These changes aim to provide tax relief for specific types of income, particularly for retirees, workers in tip-based industries, and those receiving overtime compensation.

Budget and Finance

https://legislature.maine.gov/legis/bills/display_ps.asp?LD=1622&snum=132