Maine Capital Investment Credit Worksheet - 2016 (Page 2 of 4) in pdf

2016 MAINE CAPITAL INVESTMENT CREDIT

WORKSHEET INSTRUCTIONS

This credit is available to businesses that invest in certain depreciable property in Maine in tax years beginning in 2016 and

that claim special depreciation under IRC § 168(k), commonly known as bonus depreciation, on that property. Income tax

ﬁ lers (including owners of pass-through entities) eligible to claim the credit may elect to either claim the credit (along with

the associated income addition modiﬁ cation) or to claim the regular bonus deprecation addition modiﬁ cation and the related

depreciation recapture subtraction modiﬁ cations in future years (see instructions for Form 1040ME, Schedule 1, lines 1e &

2h; Form 1041ME, Schedule 1, lines 1e & 2e; Form 1120ME, lines 2i & 4f). The election may be made with respect to each

eligible asset placed in service in Maine. If the credit is claimed, the related income addition modiﬁ cation (Form 1040ME,

Schedule 1, line 1f; Form 1041ME, Schedule 1, line 1f; Form 1120ME, line 4e) may not be recaptured in future years.

The credit is equal to a percentage of the net increase in the depreciation claimed under IRC § 168(k) for property placed

in service in Maine during the taxable year and reported as an addition to income. For tax year 2016, the credit is equal to

7% of the net increase in the depreciation claimed by taxpayers ﬁ ling as individuals and 9% for taxpayers ﬁ ling as taxable

corporations. The credit is limited to the tax liability of the taxpayer, but any unused portion may be carried forward for up to

20 years. The credit is subject to full recapture if the property is not used in Maine for the entire 12-month period following

the date placed in service. Amounts added back to income may not be recaptured in future years. This credit may not be

claimed by the following businesses:

Public utilities (deﬁ ned under 35-A M.R.S. § 102);

Persons providing radio paging services (deﬁ ned under 35-A M.R.S. § 102);

Persons providing mobile telecommunications services (deﬁ ned under 35-A M.R.S. § 102);

Cable television companies (deﬁ ned under 30-A M.R.S. § 2001);

Persons providing satellite-based direct television broadcast services; and

Persons providing multichannel, multipoint television distribution services.

Also, the credit may not be claimed with respect to property transferred out-of-state or otherwise removed from use in Maine

during the taxable year. In addition, the credit may not be claimed by a nonresident owner of a pass-through entity who

is participating in a composite return. For more information on composite ﬁ ling, see Maine Revenue Services Rule 805 at

In the case of pass-through entities (such as partnerships, LLCs, S corporations, and trusts), the partners, members,

shareholders, beneﬁ ciaries or other owners are allowed a credit on their ownership share of the bonus depreciation

generated by the pass-through entity that is eligible for the credit.

RECAPTURE INSTRUCTIONS

The amount of credit claimed on your Maine income tax return related to property transferred out-of-state or otherwise

removed from service within 12 months of being placed in service in Maine is subject to recapture. To recapture the credit,

you must ﬁ le an amended return for the tax year you claimed the credit. For example, if you claimed the credit on your

2013 Maine income tax return and the credit is subject to recapture, you must amend your 2013 Maine income tax return

to recapture the credit. If you carried an unused portion of the credit to 2014 or 2015, you must also amend the 2014 and

2015 income tax returns to remove the credit carryforward amount.

To recapture a credit and make other adjustments related to bonus depreciation, follow the instructions below. For more

information on the Maine treatment of bonus depreciation, see the Maine guidance document entitled “Modiﬁ cations Related

to Bonus Depreciation & Section 179 Expensing” at

If you ﬁ led an individual income tax return – tax years beginning in 2011 - 2016. If you claimed the Maine capital

investment credit on a Maine income tax return for 2011 -2016 and the credit is subject to recapture, follow these instructions:

●

Step 1. File an amended return (Form 1040X-ME for 2011 and 2012; Form 1040ME for 2013 through 2016) for

the tax year you claimed the credit. Make the following adjustments on the amended return:

remove from Form 1040ME, Schedule 1, line 1f the bonus depreciation addition modification amount

associated with the property subject to the credit recapture;

recalculate the addition modification amount for Form 1040ME, Schedule 1, line 1e to include in the

calculation depreciation amounts associated with the property subject to the credit recapture;

Maine Capital Investment Credit Worksheet - 2016 Page 2

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