Dual Residence Reduction of Tax Credit: Dual Residence Reduction of Tax Credit (2025)
Maine · Maine Revenue Services · Used for tax years 2025
This worksheet calculates Maine’s Dual Residence Reduction of Tax Credit for tax year 2025 using income taxed by both jurisdictions and the tax each jurisdiction assesses on that income. Enclose it with Form 1040ME and a copy of the income tax return filed with the other jurisdic
Who files this form
The 2025 worksheet is for individuals who are considered residents of both Maine and another state for income tax purposes and may qualify for a tax reduction. The other taxing jurisdiction must allow a similar tax reduction.
Income that qualifies for the credit for taxes paid to another jurisdiction generally does not qualify for this credit. Income that generally qualifies includes income from intangible sources, such as interest and pension income.
What you'll need
To complete the worksheet, have these returns and details available:
- Your 2025 Form 1040ME, including Maine adjusted gross income on line 16 and Maine tax on line 20.
- The Worksheet for Credit for Income Tax Paid to Other Jurisdiction, line 2d.
- A copy of the income tax return filed with the other jurisdiction. You must enclose this with Form 1040ME along with the completed dual residence worksheet.
- The types and amounts of income taxed by both jurisdictions as resident income, and the other jurisdiction's tax paid on the income included on line 1c.
- Your taxpayer name, SSN, and the name of the other taxing jurisdiction.
How to file
Enclose the completed Dual Residence Reduction of Tax Credit worksheet with Form 1040ME. Also enclose a copy of the income tax return filed with the other jurisdiction.
Enter the credit from line 8 on Form 1040ME, Schedule A, Other Tax Credits Worksheet (for Lines 8 and 20), line 13.
The supplied text does not give a mailing address or e-file directions.
Common mistakes
- Do not enter the amount withheld on line 4b. Enter the other jurisdiction's tax paid on the income included on line 1c.
- Do not forget to enclose the completed worksheet and a copy of the other jurisdiction's income tax return with Form 1040ME.
- Be aware that MRS may request additional information supporting the credit before the return can be processed.
Questions people ask
Does the other state have to offer a similar tax reduction?
Yes. The worksheet says individuals who are income tax residents of both Maine and another state may qualify only if the other taxing jurisdiction allows a similar tax reduction.
What kinds of income generally qualify?
Income from intangible sources, such as interest and pension income, generally qualifies. Income qualifying for the credit for taxes paid to another jurisdiction generally does not qualify for this credit.
How is the credit calculated?
The worksheet multiplies the smaller of the two jurisdictions' taxes on the eligible income by Maine's share of the combined tax on that income. On the worksheet, multiply line 6 by line 7 and enter the result on line 8.
Where can I get help completing the worksheet?
Email income.tax@maine.gov with questions about completing the worksheet.