Employer Credit for Family and Medical Leave: Employer Credit for Family and Medical Leave (2024)

Who files this form

This worksheet is for employers claiming Maine’s employer credit for family and medical leave for tax year 2024. Employers must be eligible for the federal paid family and medical leave credit under Internal Revenue Code Section 45S.

The Maine credit covers the portion of the federal credit related to qualifying leave wages paid to employees based in Maine.

For eligible pass-through entities, such as partnerships, LLCs, S corporations, and trusts, the credit is allowed to partners, members, shareholders, beneficiaries, or other owners in proportion to their interests in the entity.

What you'll need

Have these forms and details available:

• Your taxpayer name and EIN or SSN.
• Federal Form 8994, line 3, showing your federal employer credit for paid family and medical leave.
• The federal Paid Family and Medical Leave Credit Worksheet, column (b), showing qualifying leave wages used to calculate the federal credit.
• The amount of those wages paid to employees based in Maine.
• The applicable Maine return: Form 1040ME, 1040C-ME, 1041ME, 1120ME, or INS-4.

If claiming the credit through a pass-through entity, enter 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.

How to file

Complete the worksheet as follows:

1. Enter the federal credit from Form 8994, line 3, on line 1.
2. Enter total qualifying leave wages from column (b) of the federal Paid Family and Medical Leave Credit Worksheet on line 2.
3. Enter the portion of those wages paid to employees based in Maine on line 3.
4. Divide line 3 by line 2 and enter the result on line 4.
5. Multiply line 1 by line 4 to calculate the Maine credit on line 5.

Enter the credit on the applicable return location:

• Form 1040ME: line 15 of the Schedule A, Lines 7 and 19 Other Tax Credits Worksheet.
• Form 1040C-ME: Schedule A, line 9.
• Form 1041ME: Schedule A, line 15.
• Form 1120ME: Schedule C, line 1h.
• Form INS-4: line 17.

Enclose this worksheet with your applicable Maine return.

Common mistakes

• Do not treat this credit as refundable. The form states that it is not refundable.
• Do not carry unused credit back or forward to another tax year.
• If claiming through a pass-through entity, do not omit the entity’s name, ID number, your ownership percentage, or the required copy of your federal Schedule K-1. Your credit is proportional to your interest in the entity.

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

Questions people ask

What does “employees based in Maine” mean?

For this credit, these are employees who perform more than 50% of their employee-related activities for the employer at a location in Maine.

Is the Maine credit equal to the full federal credit?

The Maine credit equals the portion of the federal credit related to qualifying family and medical leave wages paid to employees based in Maine. The worksheet calculates this by multiplying the federal credit by the Maine wage percentage.

Can I get a refund or carry unused credit to another year?

The credit is not refundable. Unused credit cannot be carried back or forward to other tax years.

Can an owner of a pass-through entity claim the credit?

Yes. Owners of an eligible pass-through entity are allowed a credit in proportion to their interests in the entity. Enter the entity’s name and ID number and your ownership percentage, and attach the federal Schedule K-1 issued to you.

Official sources

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