Credit for Tax Paid To Other Jurisdictions: Credit for Tax Paid To Other Jurisdictions (2024)
Maine · Maine Revenue Services · Used for tax years 2024
This worksheet calculates Maine’s 2024 credit for income tax paid to another jurisdiction on income also taxed by Maine. It reports the income taxed by the other jurisdiction, the taxes paid, and the allowable credit, and is enclosed with Form 1040ME or Form 1041ME.
Who files this form
Use this worksheet to claim the 2024 Maine credit for income tax paid to another jurisdiction. Maine resident individuals, estates, and trusts, excluding safe harbor residents, may claim the credit if all these conditions are met:
- The other jurisdiction is another state, a political subdivision of a state, the District of Columbia, a Canadian province, or a political subdivision of a foreign country analogous to a U.S. state.
- The tax paid relates directly to income received during the tax year covered by the return. Payments for prior-year tax liabilities do not count.
- The income taxed by the other jurisdiction came from sources in that jurisdiction.
Part-year resident individuals may claim the credit only for income earned during their Maine residency period, excluding any safe harbor residency period, and must meet the same conditions. Special instructions apply to part-year residents who qualify for both this credit and the nonresident credit.
What you'll need
- Your Maine Form 1040ME or Form 1041ME, including the schedules used to calculate the credit.
- A copy of the income tax return filed with each other jurisdiction for which you claim a credit. You must enclose these copies with your Maine return.
- A separate completed credit worksheet for each other jurisdiction.
- Any applicable income modification schedules: Form 1040ME, Schedules 1A and 1S, or Form 1041ME, Schedule 1.
Part-year resident calculations also use Schedule NR or Schedule NRH and Maine Worksheet B.
If you request an alternative method for allocating the other jurisdiction’s tax, attach a worksheet showing your proposed calculation. Maine Revenue Services may request additional information supporting the credit before processing the return.
How to file
- Enter your name, SSN, and the other taxing jurisdiction’s name on the worksheet.
- Complete the income and tax calculations. The allowable credit on line 5 is the smaller of line 4a, Maine tax on the income also taxed by the other jurisdiction, or line 4b, the other jurisdiction’s tax on that income.
- Enter the credit on Form 1040ME, Schedule A, line 13, or Form 1041ME, Schedule A, line 7.
- Enclose the worksheet and a copy of the other jurisdiction’s income tax return with your Maine return.
If claiming credit for more than one jurisdiction, complete a separate worksheet for each one. Add the line 5 amounts and enter the total on the applicable Maine Schedule A line.
Part-year resident individuals should follow the special instructions on page 3. The text does not provide a mailing address or e-file directions.
Common mistakes
- Entering withholding on line 4b. Do not report income taxes withheld on this line. Follow the instructions for calculating the income tax paid on the income included on line 2d.
- Treating work performed in Maine as income sourced elsewhere. Income earned while working in Maine, including teleworking, is sourced to Maine. Do not include it on line 2a.
- Overstating line 2a. It cannot exceed Form 1040ME, line 14, or Form 1041ME, line 1.
- Including unrelated income adjustments. Lines 2b and 2c should include only adjustments attributable to income on line 2a.
- Including nonresident-period income for a part-year resident. Do not include income earned while a Maine nonresident or safe harbor resident on line 2a.
- Including deductions or exemptions in the proration worksheet’s line 2. Do not include standard or itemized deductions or personal exemptions there.
- Combining jurisdictions on one worksheet. Calculate each jurisdiction’s credit separately and include the required return copies.
Questions people ask
How much credit can I claim?
The credit is the smaller of the Maine tax on income also taxed by the other jurisdiction, calculated on line 4a, or the other jurisdiction’s income tax on that income, calculated on line 4b.
What if the other jurisdiction taxed income that is not on line 2d?
Complete the Worksheet to Prorate the Tax Paid to Other Jurisdiction on page 2. If its adjusted other-jurisdiction gross income on line 3 is zero or less, stop. You do not qualify for a credit.
Can I request a different way to allocate the other jurisdiction’s tax?
Yes. If the proration worksheet does not fairly represent the tax paid on income taxed by Maine, attach a worksheet to Form 1040ME or Form 1041ME showing your proposed calculation. You will be notified if it is not approved.
What if both Maine and another state consider me a resident?
Individuals who are income tax residents of both Maine and another state, excluding Maine safe harbor residents, may qualify for a dual resident credit under 36 M.R.S. § 5128. The instructions direct readers to maine.gov/revenue/tax-return-forms for more information.