Maine State Tax Credits

More ways to save your hard-earned money from the tax man!

Maine has some great Tax credits for you....

Thank you so much for checking our resource out here for your state and congratulations for taking a proactive step to paying less in taxes. For your state, we have identified the tax credits that are currently being offered to help you pay less in state taxes.

We hope this resource is helpful to you, and if there is something you feel we have missed, please let us know!

It would be completely arrogant of us to think that we know all things and if we missed something we want to know so we can vet that and help you and our other friends in the entrepreneurial community pay less in taxes! And if you found this helpful, you should check out our DIY resources inside of our Tax Savings Communities (found at www.MakeTaxesFair.com/Our-Communities).

We're also ready to help you if you want to skip the line of the DIY process and get help directly from us. To learn more about how we help our clients check out www.MakeTaxesFair.com/Get-My-Roadmap

 
Main

Maine Employment Tax Increment Financing (ETIF)

Overview:
Maine’s ETIF program offers reimbursement of up to 80% of state income tax withholdings for businesses that create new, quality jobs. It’s designed to encourage business expansion and relocation within the state by rewarding employers for workforce growth and employee benefits.

Who It’s For:
For-profit businesses (non-retail, non-utility) in Maine—or relocating to Maine—that plan to add at least five net new jobs and offer competitive compensation and benefits.

Four Key Highlights:

  1. Reimbursement Up to 80%

    • Eligible businesses can receive up to 80% of Maine income tax withholdings from new employees for up to 10 years.

  2. Minimum Job Creation Requirement

    • Must create at least five net new jobs within two years. All employees count if the business is new to Maine.

  3. Employee Qualification Standards

    • New hires must earn more than the county’s average per-capita income and have access to group health insurance and a retirement plan.

  4. Annual Compliance & Reporting

    • Businesses must report job growth, wages, and benefits annually to maintain eligibility and continue receiving reimbursements.

Maine Seed Capital Tax Credit Program

Overview:
The Maine Seed Capital Tax Credit Program encourages equity investments in Maine-based businesses by offering a 40% tax credit to eligible investors. The program is managed by FAME (Finance Authority of Maine) and aims to boost startups in manufacturing, tech, and value-added natural resources.

Who It’s For:
Maine-based startups looking to attract investment, and individual or institutional investors seeking tax credits for supporting early-stage businesses.

Four Key Highlights:

  1. 40% Tax Credit for Investors

    • Qualified investors can claim a tax credit equal to 40% of their investment, up to $500,000 per business over three years.

  2. Eligibility Focused on Innovation & Export

    • Businesses must have under $5M in sales, be located in Maine, and operate in sectors like advanced tech, manufacturing, or media, with a focus on export-driven growth.

  3. 15-Year Carryforward Window

    • Credits are issued in 25% increments over four years and can be carried forward for up to 15 years if not fully used.

  4. Strict Ownership & Reporting Rules

    • Investors must not control the business or own over 50%, and both businesses and funds must file annual reports or risk losing the credit.

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Maine New Markets Capital Investment Program

Overview:
The Maine New Markets Capital Investment Program offers a 39% state income tax credit to certified Community Development Entities (CDEs) that invest in qualified Maine businesses located in low-income communities. The goal is to drive economic development and job creation in underinvested areas across the state.

Who It’s For:
Certified Community Development Entities (CDEs) with active federal New Markets allocation agreements including Maine in their service area.

Four Key Highlights:

  1. 39% Tax Credit Over 7 Years

    • CDEs can claim a 39% tax credit on eligible investments, disbursed over years 3 through 7 (7%, 8%, 8%, 8%, 8%).

  2. $40 Million Investment Cap per Business

    • Each CDE can invest up to $40 million per qualified business located in low-income Maine communities.

  3. Eligibility Based on Federal & State Experience

    • Applicants must be federally certified and meet four out of five criteria relating to investment experience and regional activity.

  4. Strict Reporting & Recapture Rules

    • Annual compliance reporting is mandatory, and failure to meet program terms may trigger credit recapture by the state.

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Maine Research Expense Tax Credit

Overview:
The Maine Research Expense Tax Credit incentivizes corporations to conduct qualified research within the state by offering a tax credit on eligible research-related expenditures. It mirrors aspects of the federal R&D tax credit and encourages innovation and high-skill job creation.

Who It’s For:
Maine-based corporations performing qualified research as defined under Section 41(e)(1)(A) of the Internal Revenue Code.

Four Key Highlights:

  1. Dual-Level Credit Structure

    • Businesses earn 5% on research expenses exceeding their base amount and 7.5% on qualified basic research payments.

  2. Flexible Tax Offset

    • Credit can be applied to 100% of the first $25,000 in corporate tax liability and 75% of the remainder.

  3. Long Carryforward Period

    • Unused credits may be carried forward for up to 15 years, allowing strategic use over time.

  4. Strict Eligibility Requirements

    • Activities must meet IRS research definitions, and proper documentation is essential to claim and retain the credit.

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