Maine Minimum Tax Worksheet Instructions Form

SCHEDULE A – MAINE TAX ADJUSTMENTS

SECTION 1 - TAX ADDITIONS:

Line 1. RETIREMENT PLAN DISTRIBUTIONS. If you choose to compute a separate federal tax on a lump-sum distribution from a retirement plan, you are subject

to an additional Maine tax equal to 15% of the federal tax. NOTE: Distributions of Maine State Retirement System contributions previously taxed by Maine are not

subject to this special tax.

Line 2. EARLY DISTRIBUTION FROM A QUALIFIED RETIREMENT PLAN. If you are subject to the special federal tax on an early distribution from a qualified

retirement plan, you are subject to an additional Maine tax equal to 15% of the federal tax. NOTE: Distributions relative to Maine State Retirement System

contributions previously taxed by Maine are not subject to this special tax.

Line 3. MAINE MINIMUM TAX. If you have a federal tentative minimum tax on federal Form 6251, you must complete and enclose the Maine Minimum Tax

Worksheet on page 19.

SECTION 2 - TAX CREDITS:

Line 5. CREDIT FOR THE ELDERLY. If you qualify for the federal credit for the elderly or for the permanently and totally disabled, you may claim 20% of the federal

credit as a Maine credit.

Line 6. CREDIT FOR CHILD AND DEPENDENT CARE. If you qualify for this federal credit, you may claim 25% of your federal credit as a Maine credit.

Line 7. EARNED INCOME TAX CREDIT (EIC). If you qualify for the federal earned income credit, you may claim 5% of the federal credit as a Maine credit.

Line 8. CREDIT FOR INCOME TAX PAID TO OTHER JURISDICTIONS. This credit is computed on Schedule 3, page 15. 36 M.R.S.A. § 5217-A.

Line 9. MAINE SEED CAPITAL CREDIT. The Finance Authority of Maine administers this program. The Authority issues a tax credit certificate after verifying the

eligibility of the investor. The taxpayer must enclose a copy of the certificate with Schedule A, Form 1040ME when requesting a tax credit under this program. This

credit is limited to 50% of the Maine income tax due. Carryover provisions apply. 36 M.R.S.A. § 5216-B.

Line 10. EMPLOYER-ASSISTED DAY CARE CREDIT. An employer may claim a credit for providing day care services or for paying day care expenses of

employees. This credit is limited to the lowest of $5,000, 20 percent of the cost incurred, or $100 per child enrolled on a full-time basis. It cannot exceed the Maine

income tax due. Carryover provisions apply. 36 M.R.S.A. § 5217. Enclose a schedule showing the computation of this credit.

Line 11. INVESTMENT TAX CREDIT. The credit applies to qualified investments made after December, 1988 and prior to April 2, 1996. Certain limitations apply.

See 36 M.R.S.A. § 5219-E.

Line 12. FOREST MANAGEMENT PLANNING CREDIT. Once every 10 years an individual taxpayer is allowed a credit of up to $200 for expenses incurred in

developing a forest management and harvest plan for a parcel of forest land which is more than 10 acres. A professional forester who is not in the regular employ

of the owner must prepare the plan. The taxpayer claiming the credit must attach to the income tax return a statement from the forester supporting the claim and a

sworn statement that the credit has not been claimed in the previous 10 years. 36 M.R.S.A. § 5219-C.

Line 13. EMPLOYER-PROVIDED LONG-TERM CARE CREDIT. An employer may claim a limited credit for expenses incurred in providing long-term care policy

coverage as part of an employee benefit package. To qualify, the insurance policy on which the premiums are paid must meet the federal definition for a long-term

care insurance contract (IRC § 7702-B(b)). However, premiums paid on policies previously certified by the Bureau of Insurance as being eligible for this credit will

continue to be eligible even if the policy does not meet the federal definition of a long-term care insurance contract. The credit is limited to the lowest of $5,000, 20

percent of the cost incurred, or $100 per employee covered. 36 M.R.S.A. § 5217-C. Enclose a schedule showing the computation of this credit.

Line 14. JOBS AND INVESTMENT TAX CREDIT. A taxpayer, other than a public utility, may claim a tax credit for qualified jobs and investment subject to limitations. Eligibility

for the credit requires (1) the addition of $5 million of IRC § 38 Property based on Internal Revenue Code of 1954, as of December 31, 1985, § 38(b)(1), and (2) 100 new

employees in Maine during the 24 months after placing the property in service. This credit is limited to $500,000 or the Maine income tax due, whichever is less. Jobs created

between August 1, 1998 and October 1, 2001 must be covered by qualified retirement and health insurance plans and wages must be greater than the average per capita income

in the labor market area in which the employee is employed. Carryover provisions apply. 36 M.R.S.A. § 5215. Enclose a schedule showing the computation of this credit.

Line 15. SOLID WASTE REDUCTION INVESTMENT TAX CREDIT. Attach to the return a copy of the tax credit certificate(s) issued by the State Planning Office. The credit

applies to equipment purchased and placed in service during the periods January 1, 1990 to June 30, 1991 or January 1, 1993 to June 30, 1995. 36 M.R.S.A. § 5219-D.

Line 16. RESEARCH EXPENSE TAX CREDIT. The credit equals 5% of qualified research expenses incurred during the taxable year that exceed the average

qualified research expense for the previous three tax years, plus 7.5% of the basic research payments determined pursuant to IRC § 41(e)(1)(A). Only expenditures

for research conducted in Maine qualify for the credit. The term “qualified research” is defined in IRC § 41(d). The credit is limited to the tax liability of the taxpayer.

Carryover provisions apply. The credit applies to tax years beginning on or after January 1, 1996. 36 M.R.S.A. § 5219-K.

Line 17. RESEARCH & DEVELOPMENT SUPER CREDIT. Businesses whose research expenses increased by more than 50% over the average research

expenses incurred in the 3 years immediately preceding the effective date of the credit qualify for the credit. The credit is equal to the excess over 150% of the 3-year

average. It is limited to 50% of the net income tax due after other credits and may not reduce the taxpayer’s tax liability to less than the net tax liability in the preceding

year after other credits. Carryover provisions apply. The credit applies to tax years beginning on or after January 1, 1998. 36 M.R.S.A. § 5219-L.

Line 18. HIGH-TECHNOLOGY CREDIT. Businesses primarily engaged in high-tech activities and that (a) lease, (b) purchase and use, or (c) purchase and lease

computer equipment, electronic components and accessories, communications equipment or computer software placed in service in Maine and used in “high-technology

activities” qualify. The credit is equal to the adjusted basis of eligible equipment for federal income tax purposes or the amount of lease payments made (by lessee)

minus any lease payments received for the eligible equipment during the tax year. The lessor may claim the credit only if the lessee waives entitlement to the credit. The

reimbursement period for the Business Equipment Tax Reimbursement must be reduced one year for each tax year the eligible equipment is included in the basis for the

High-Technology Credit. Also, Maine taxable income must be increased by the amount of the investment credit base also claimed as a business expense for federal

income tax purposes. Carryover provisions apply. The credit applies to tax years beginning on or after January 1, 1998. 36 M.R.S.A. § 5219-M.

Line 19. MAINE MINIMUM TAX CREDIT. Complete the worksheet on page 19. See 36 M.R.S.A. § 5203-A(5).

Line 20. CREDIT FOR DEPENDENT HEALTH BENEFITS PAID. Employers that offer a qualified health benefit plan and that employ fewer than 5 low-income

employees may qualify for a credit equal to the lesser of 20% of the dependent health benefits paid by the employer or $125 per employee with dependent health

benefits coverage. A taxpayer that employs 5 or more low-income employees after qualifying for the credit may continue to qualify for the credit for another 2 years.

The credit is limited to 50% of the income tax due. The credit is subject to additional restrictions. Enclose a schedule showing the computation of this credit.

Carryover provisions apply. The credit applies to tax years beginning on or after January 1, 1999. 36 M.R.S.A. § 5219-O.

Line 21. CLEAN FUEL CREDIT. The credit equals 50% of expenditures made or incurred from January 1, 1999 to December 31, 2001 for construction, installation

of or improvements to any filling station or charging station in Maine for the purpose of providing clean fuels to the general public for use in motor vehicles. From

January 1, 2002 to December 31, 2005 the credit is 25% of these expenditures. Enclose a schedule showing the computation of this credit. The credit automatically

expires January 1, 2006. 36 M.R.S.A. § 5219-P.

Line 22. HISTORIC REHABILITATION CREDIT. The credit is equal to the amount of the federal credit for rehabilitation of certified historic structures located in

Maine. The credit is nonrefundable and is limited to $100,000 annually per taxpayer. The credit is subject to the same recapture provisions as under the Internal

Revenue Code. 36 M.R.S.A. § 5219-R.

Line 23. FAMILY DEVELOPMENT ACCOUNT CREDIT. This credit is available to contributors to family development matching fund accounts. The Finance Authority

of Maine certifies the allowable credit for each contributor. A copy of the certificate must be attached to the return. The credit is nonrefundable and must be taken after

all other credits. Amounts claimed may not be claimed as itemized deductions for Maine purposes. Other limitations apply. 36 M.R.S.A. § 5216-C.

Line 26. ALLOWABLE CREDITS. These credits are not refundable. The total credit claimed cannot exceed the Maine income tax otherwise due for the taxable year.

SAWMILL BIOMASS CREDIT. This credit is available to eligible taxpayers that (1) produce merchantable lumber or secondary wood products and (2) transport wood

processing residue (bark and sawdust material) to qualifying facilities. A qualifying facility is a facility not affiliated with the taxpayer that uses the residue to generate

electricity, industrial heat or steam; for landscaping mulch or soil amendment (but not for landfill); for composting of sewer sludge; to manufacture certain building

products; or to convert to ethanol or other forms of fuel. The credit applies to deliveries made from July 1, 2000 to June 30, 2001. The credit is equal to an amount

up to $6 per ton (dependent on the number of miles the residue is transported) minus amounts received for the residue. To claim this credit, call 1 (207) 624-7894 and

request the Sawmill Biomass Credit Application.

Maine Minimum Tax Worksheet Instructions Form - 2000

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