Credit for Disability Income Protection Plans: Credit for Disability Income Protection Plans (2024)

Who files this form

Use this worksheet to claim the 2024 Maine credit for disability income protection plans. The credit is available to certain employers that offer employees a qualified short-term or long-term disability income protection plan.

An employer must claim the credit for the first tax year in which it becomes eligible and may claim it for no more than 3 consecutive tax years.

For eligible pass-through entities, such as partnerships, LLCs, S corporations, and trusts, owners may claim the credit in proportion to their interests in the entity.

What you'll need

• The completed 2024 Credit for Disability Income Protection Plans worksheet, including your taxpayer name and EIN or SSN.
• A copy of the Maine Bureau of Insurance certificate confirming that the plan offered to employees is qualified. Attach it to the worksheet.
• The policy Form Number approved by the Maine Bureau of Insurance for each plan type checked.
• The number of qualifying employees enrolled in the plan during the tax year.
• If claiming through a pass-through entity, its name, EIN or SSN, and your ownership percentage for the tax year. Attach a copy of the federal Schedule K-1 the entity issued to you.
• The applicable return: Form 1040ME, Form 1040C-ME, Form 1041ME, or Form 1120ME.

How to file

Enclose the worksheet with Form 1040ME, Form 1040C-ME, Form 1041ME, or Form 1120ME, whichever applies.

1. On line 1, enter the number of qualifying employees enrolled in either qualified plan after January 1, 2017. Count each employee only once. Exclude employees enrolled in a disability income protection plan during the employer’s tax year immediately before the year the employer became eligible for the credit.
2. Check the applicable long-term and/or short-term plan boxes and enter the approved policy Form Numbers.
3. Multiply line 1 by the $30 credit rate on line 2. Enter the result on line 3.
4. Transfer the result to the applicable location:

• Form 1040ME, Schedule A, Lines 7 and 19 Other Tax Credits Worksheet, line 6;
• Form 1040C-ME, Schedule A, line 14;
• Form 1041ME, Schedule A, line 17; or
• Form 1120ME, Schedule C, line 1n.

Attach the required certificate and, if applicable, your federal Schedule K-1.

Common mistakes

• Counting the same employee more than once on line 1.
• Including employees who were enrolled in a disability income protection plan during the employer’s tax year immediately before its first eligible year.
• Leaving out the required Maine Bureau of Insurance certificate or, for a pass-through claim, the federal Schedule K-1.
• Claiming more than your proportional share of a pass-through entity’s credit.
• Claiming a credit above your tax liability or carrying an unused amount to another tax year. Neither is allowed.

Maine Revenue Services may request additional information supporting the credit before the return can be processed.

Questions people ask

How much is the credit?

The credit is $30 per qualifying employee enrolled in a qualified plan during the tax year. It is limited to your tax liability.

Can I claim the credit for more than one year?

Yes. You must claim it for the first tax year in which you become eligible, and you may claim it for no more than 3 consecutive tax years.

Can I carry an unused credit to another year?

No. Unused credit cannot be carried back or forward to other tax years.

What is an elimination period?

It is the time when an employee cannot work because of a covered sickness or injury but is not yet eligible for disability benefits under the plan. A qualified long-term plan must have an elimination period of no more than 185 days. A qualified short-term plan must have one of no more than 30 days.

Official sources

• https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/24_disability_inc_prot_plan_cr_ff_0.pdf