Information current as of January 31, 2021.
The SARS-CoV-2 virus and the incidence of COVID-19 are changing life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor™ or visit our COVID-19 Resource Center for current information as needed.
Information Specific to Maine
- Maine extended the individual income, corporate income and trust income tax filing and payment deadline to July 15 from April 15. This includes any final and estimated Maine income tax payments due by April 15, 2020. Sales tax and payroll payments will continue as normal.
- Governor’s Office announcement, March 26, 2020.
- Maine DOR Tax Alert No. 4, March 27, 2020.
- Maine extended the April 1 statutory application deadline for certain property tax exemptions to the earlier of the commitment date of the municipality, or 30 days after the termination of the emergency. The extension applies to the exemptions for: 1) institutions and organizations; 2) estates of veterans; 3) solar and wind energy equipment; 4) homesteads; and 5) business equipment.
- Governor’s Executive Order No. 31 FY 19/20, March 31, 2020
- Maine has expanded its COVID-19 tax extension. The extension to July 15, 2020, now also includes second-quarter estimated payments and any estimated or final payments originally due April 16 through June 15 for fiscal-year filers.
- Maine Tax Alert Vol. 30, No. 11, April 29, 2020.
- Maine has clarified that the special personal income tax exemption for a nonresident’s income earned during a disaster period applies during the COVID-19 disaster period. Currently, the disaster period runs for 60 days beginning with the date of the governor’s proclamation of a state of emergency on March 15, 2020. Specifically, the taxpayer must be a nonresident whose presence in Maine during the tax year is for the sole purpose of performing services or conducting business during a disaster period and whose compensation or income is directly related to a declared state disaster or emergency at the request of either the state, subdivision or a registered business.
- Maine DOR FAQs, May 7, 2020.
- Maine clarified that because it conforms to the Internal Revenue Code as amended through December 31, 2019, taxpayers filing their 2019 Maine income tax returns by July 15 should do so without regard to federal tax provisions enacted after December 31, 2019. Prior to July 15, Maine Revenue Services will provide guidance and instructions on how to file 2019 Maine income tax returns in light of these recent federal changes. In addition, Maine Gov. Janet T. Mills is considering possible legislation that would conform to certain new federal tax provisions.
- Maine DOR Tax Alert Vol. 30, No. 14, June 16, 2020.
- Maine has further extended the filing deadline for state corporate taxpayers, on extension, from October 15, 2020, to November 16, 2020. This includes tax year 2019 returns filed on Maine Form 1120ME (corporate income tax return) or Maine Form 1120B-ME (franchise tax return). Accordingly, late filing penalties will be abated for such returns that are filed by November 16, 2020. However, if applicable, other associated penalties and interest will continue to accrue.
- Maine DOR Tax Alert, Vol. 30, No. 18, October 5, 2020.
- Maine clarified that late filing penalties will be abated for any 2019 Corporate Income Tax Return Form 1120ME or 2019 Franchise Tax Return Form 1120BME filed by November 16, the extended deadline (which is automatically provided) for filing the returns, for corporate income and excise tax purposes. Other associated penalties, like underpayment penalty and interest, will continue to accrue.
- Maine DOR FAQs, October 7, 2020.
- Maine provided additional guidance on COVID-19 emergency tax provisions for tax years beginning in 2020. Maine Revenue Services will not consider the presence of employees in Maine, who commenced working remotely from within the state during the state of emergency and due to the COVID-19 pandemic, to establish, by itself, corporate income tax nexus or constitute substantial physical presence in Maine for sales and use tax registration and collection duty purposes. Maine income tax withholding for wages paid in 2020 to a Maine resident suddenly working in state due to a state’s COVID-19 state of emergency will continue to be calculated as if the Maine resident were still working outside the state. If an estimated income tax payment penalty is due by a Maine resident taxpayer as a result of the taxpayer suddenly working in Maine due to a state’s COVID-19 state of emergency, the penalty will be abated upon request by the taxpayer. Maine will introduce legislation in January to prevent double-taxation of residents as a result of COVID-19-related telework by allowing the tax credit for income tax paid to other jurisdictions if another jurisdiction is asserting an income tax obligation for the same income, despite the employee no longer physically working in that jurisdiction due to COVID-19.
- Maine DOR Tax Alert, Vol. 30, No. 19, October 19, 2020.
- Maine provided a number of tax clarifications and updates related to COVID-19. Federal economic impact payments, or “stimulus checks,” received in 2020 by individuals aren’t taxable under federal or Maine income tax laws. This also is true for payments issued as part of the recently enacted Coronavirus Response and Relief Supplemental Appropriations Act, 2021. Unemployment benefits received in 2020, including any increased benefits, are taxable in Maine to the extent included in federal adjusted gross income. Further, federal and state grants and loan forgiveness are, to the extent included in federal adjusted gross income and not otherwise exempt from taxation under Maine law, taxable to Maine. Maine income tax withholding for wages paid through June 30, 2021, to a Maine resident suddenly working in Maine due to a state’s COVID-19 state of emergency will continue to be calculated as if the Maine resident were still working outside Maine. For estimated income tax payments due between January and June 2021 by a Maine resident individual with respect to a tax year beginning in 2021, Maine Revenue Services will, upon request, abate the penalty for the underpayment of estimated tax that becomes due as a result of the taxpayer suddenly working in Maine due to a state’s COVID-19 state of emergency. For the period January 1, 2021, through June 30, 2021, with respect to a tax year that begins in 2021, Maine Revenue Services won’t consider the presence of one or more employees in Maine who commenced working remotely from Maine during the state of emergency and due to the COVID-19 pandemic to establish, by itself, corporate income tax nexus.
- Maine DOR, Notice to Maine Income Taxpayers; January 26, 2021.