Worksheet For Form 1040me, Schedule 1, Line 1h (Page 2 of 2) in pdf

Worksheet for Form 1040ME, Schedule 1, Line 1h

Income Modiﬁ cations - Other Additions

Income and deductions are generally treated the same for Maine tax purposes as treated for federal tax purposes. However,

certain federal and state laws may require different tax treatment of these items. These differences require adjustments, or

modiﬁ cations, to federal income to calculate Maine taxable income. See Form 1040ME, Schedule 1.

Addition modiﬁ cations are required for items of income that are not included in federal income but are subject to Maine

individual income tax or to reverse a federal deduction not allowed for Maine tax purposes. See Form 1040ME, Schedule

1, lines 1a through 1i. The least common adjustments included on Form 1040ME, Schedule 1, line 1h are listed on this

worksheet. See descriptions below for each item.

Line 1. Adjustment for loss, deductions and other expenses of a pass-through entity ﬁ nancial institution subject

to Maine franchise tax. Under Maine law, ﬁ nancial institutions are subject to the Maine franchise tax, regardless

of how the institution is organized. This includes a ﬁ nancial institution organized as a pass-through entity, such as

a partnership or limited liability company. Maine law provides that the income from an ownership share in a pass-

through entity ﬁ nancial institution is not taxable income on the owner’s Maine income tax return. In like manner,

any loss, deduction or expense of a pass-through entity ﬁ nancial institution reﬂ ected in an owner’s federal income

is not permitted in calculating the Maine taxable income of the owner. (36 M.R.S. § 5122(1)(K)).

Enter on this line any loss, deduction and expense included in the calculation of your federal adjusted gross income

that is associated with an ownership share in a pass-through entity ﬁ nancial institution subject to the Maine franchise

tax.

Line 2. High-technology investment tax credit adjustment. Maine taxpayers claiming the high-technology investment

tax credit under 36 M.R.S. § 5219-M who also deducted depreciation or other related expenses on their federal

tax return for qualiﬁ ed property for which the credit is claimed during the year must increase Maine income by the

amount federal income was reduced. Generally, this amount includes ﬁ rst-year depreciation claimed for the related

equipment, but may also include other expenses that reduce the basis of eligible equipment. (36 M.R.S. §§ 5122(1)

(J) and 5219-M).

Enter on this line the amount of any deduction (such as depreciation and expenses) claimed for federal income tax

purposes that is included in the credit base for the high-technology investment tax credit claimed for the taxable year.

Line 3. Forest management planning credit adjustment. Maine taxpayers who claim the forest management planning

credit who also deducted the cost of the forest management plan as an expense on their federal income tax return

must increase Maine taxable income by the amount federal income was reduced. (36 M.R.S. § 5219-C).

Enter on this line the amount of any deduction (such as depreciation and expenses) claimed for federal income tax

purposes that is included in the credit base for the forest management planning credit.

Line 4. Maine ﬁ shery infrastructure investment adjustment. Maine taxpayers who claim the Maine ﬁ shery infrastructure

investment tax credit under 36 M.R.S. 5216-D who also deducted an amount included in the base for the credit on

their federal tax return must increase Maine taxable income by the amount federal income was reduced. 36 M.R.S.

§§ 5122(1)(GG) and 5216-D).

Enter on this line the amount of any expense or deduction, including itemized deductions, claimed for federal

income tax purposes that is used to calculate the Maine ﬁ shery investment tax credit claimed for the taxable year.

Line 5. Wellness programs tax credit adjustment. Maine taxpayers who claim the Maine credit for wellness programs

under 36 M.R.S. § 5219-FF and deducted related expenses on their federal tax return must increase Maine taxable

income by the amount federal income was reduced. Applies to tax years beginning on or after January 1, 2014. (36

M.R.S. § 5122(1)(EE)).

Enter on this line the amount of any deduction (such as depreciation and expenses) claimed for federal income tax

purposes that is used to calculate the wellness programs tax credit claimed for the taxable year.

Line 6. Qualiﬁ ed tuition and other education expense adjustment. The amount of qualiﬁ ed tuition and other education

expenses claimed on the federal return in accordance with section 222 of the Code is not allowed for Maine income

tax purposes. Applies to tax years beginning on or after January 1, 2003 but before January 1, 2015 unless further

extended by the federal government. (36 M.R.S. § 5122(1)(Q)).

Worksheet For Form 1040me, Schedule 1, Line 1h Page 2

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