Credit for Disability Income Protection Plans: Credit for Disability Income Protection Plans (2025)

Who files this form

Use this 2025 worksheet to claim the credit for certain employers that offer employees a qualified short-term or long-term disability income protection plan. The credit is $30 per qualifying employee enrolled during the tax year.

An eligible employer must first claim the credit for the 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 a credit in proportion to their interests in the entity.

What you'll need

• A copy of the Maine Bureau of Insurance certificate confirming that the disability income protection plan is qualified. Attach it to the worksheet.
• The approved policy Form Number for each applicable short-term or long-term plan.
• The number of qualifying employees enrolled during the tax year.
• Your taxpayer name and EIN or SSN.
• If claiming through a pass-through entity, the entity’s name, EIN or SSN, your ownership percentage for the tax year, and a copy of the federal Schedule K-1 it issued to you. Attach the Schedule K-1.

Maine Revenue Services may request additional information supporting the credit before processing the return.

How to file

1. Enter the number of qualifying employees on line 1. The worksheet specifies enrollment after January 1, 2017. Count each employee only once.
2. Check box 1a for a long-term plan, box 1b for a short-term plan, or both as applicable. Enter each applicable policy’s approved Form Number.
3. Multiply line 1 by the $30 rate on line 2. Enter the credit on line 3.
4. Transfer the credit to the applicable return:

• Form 1040ME, Schedule A, Other Tax Credits Worksheet for Lines 8 and 20, line 7.
• Form 1040C-ME, Schedule A, line 16.
• Form 1041ME, Schedule A, line 18.
• Form 1120ME, Schedule C, line 1n.

1. Enclose the worksheet with the applicable return and attach the required supporting documents.

Common mistakes

• Counting an employee more than once, including when the employee is enrolled in both types of plan.
• Including employees who were enrolled in a disability income protection plan during the employer’s tax year immediately before the year the employer became eligible for the credit.
• Failing to claim the credit for the first eligible tax year, or claiming it for more than 3 consecutive tax years.
• Claiming more than the taxpayer’s tax liability or carrying unused credit back or forward to another tax year.
• Leaving out the required plan certificate or, when applicable, the pass-through entity’s federal Schedule K-1.

Questions people ask

What makes a long-term disability income protection plan qualified?

The plan must:

• Have been established after January 1, 2017, or be an existing plan reopened for enrollment.
• Allow employees to opt out.
• Meet the group disability income protection plan requirements under 24-A M.R.S. § 2804-B.
• Have an elimination period of no more than 185 days.
• Replace at least 50% of pre-disability earnings before applicable offsets.
• Offer benefits for at least 24 months.
• Have a policy Form Number approved by the Maine Bureau of Insurance as qualifying for the credit.

What makes a short-term disability income protection plan qualified?

The plan must:

• Have been established after January 1, 2017, or be an existing plan reopened for enrollment.
• Allow employees to opt out.
• Meet the group disability income protection plan requirements under 24-A M.R.S. § 2804-B.
• Have an elimination period of no more than 30 days.
• Replace income of at least $200 per week.
• Offer benefits for at least 6 months.
• Have a policy Form Number approved by the Maine Bureau of Insurance as qualifying for the credit.

What is an elimination period?

It is the period when an employee cannot work because of a covered sickness or injury but is not yet eligible for disability benefits under the plan.

Official sources

• https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/25_disability_inc_prot_plan_cr_fillable.pdf