Pine Tree Development Zone Tax Credit: Pine Tree Development Zone Tax Credit (2024)
Maine · Maine Revenue Services · Used for tax years 2024
This worksheet calculates Maine’s Pine Tree Development Zone tax credit for tax year 2024. It determines the share of qualified business activity and applies the credit rate to the related Maine income or insurance premiums tax.
Who files this form
Use this worksheet if you are claiming the Maine Pine Tree Development Zone (PTDZ) tax credit for tax year 2024:
- Corporate taxpayers, including insurance companies, must calculate the credit using this worksheet.
- Individuals, estates, and trusts claiming the credit from a sole proprietorship or pass-through entity must use both this worksheet and Worksheet PTE.
Businesses not certified as Tier 1 qualified businesses do not qualify for the credit. Owners of pass-through entities may claim credits in proportion to their ownership interests.
When it's due
The tax year 2024 worksheet lists these program deadlines:
- December 31, 2024: Businesses may not be certified for PTDZ benefits after this date.
- December 31, 2034: Program benefits, including the income tax credit, will cease on this date.
The worksheet does not list a filing due date for the 2024 tax return.
What you'll need
Gather the following to complete and submit the worksheet:
- Your taxpayer name and EIN or SSN.
- A copy of the PTDZ certificate issued by the Department of Economic and Community Development (DECD), which must be attached to your return.
- Worksheet PTE if you are an individual, estate, or trust taxpayer.
- A copy of your federal Schedule K-1 if claiming through a pass-through entity. Also provide the entity's name, EIN or SSN, and your ownership percentage for the tax year.
- Your regular income or insurance premiums tax amount from the applicable Maine return.
- The number of years you have previously claimed the credit.
Corporate taxpayers also need the property and payroll amounts used on lines 1 through 4, including the required amounts for affiliated businesses.
How to file
Enclose the completed worksheet with your applicable return: Form 1040ME, Form 1040C-ME, Form 1041ME, Form 1120ME, or Form INS-4. Attach the required worksheets and a copy of your DECD PTDZ certificate. Pass-through entity owners must also attach their federal Schedule K-1.
Enter the final credit from line 11 on the applicable return:
- Form 1040ME, Schedule A, line 18.
- Form 1040C-ME, Schedule A, line 8.
- Form 1041ME, Schedule A, line 14.
- Form 1120ME, Schedule C, line 1d.
- Form INS-4, line 17.
The supplied text does not provide a mailing address or e-file instructions.
Common mistakes
- Completing the wrong lines: Individuals, estates, and trusts must skip lines 1 through 6 and enter the amount from Worksheet PTE, line 8, on line 7.
- Including excluded property or payroll: Do not include property transferred by an affiliated business from elsewhere in Maine as qualified property. Do not include payroll for jobs or positions transferred by the business or an affiliated business from elsewhere in Maine as qualified payroll.
- Claiming without Tier 1 certification: Businesses not certified as Tier 1 qualified businesses do not qualify.
- Using the wrong credit rate: Enter 1.00 for the first five years of qualified business activity and .50 for the second five years. The credit is not available after ten years.
- Leaving out required attachments: Attach the required worksheets, DECD certificate, and, when claiming through a pass-through entity, your federal Schedule K-1.
Maine Revenue Services may request additional information supporting the credit before processing the return.
Questions people ask
What is the PTDZ tax credit?
It is a credit available to certain businesses that expand or begin operations in Maine. For Tier 1 qualified businesses, it covers up to 100% of Maine tax liability related to qualified activity for the first five tax years and 50% for tax years six through ten.
Can a pass-through entity owner claim the credit?
Yes. Partners, members, shareholders, beneficiaries, and other owners may claim credits in proportion to their interests in the entity. They must provide the entity information and ownership percentage and attach a copy of their federal Schedule K-1.
Does the credit apply to all of an individual's income tax?
The credit applies to tax liability related to qualified business activity. Worksheet PTE accounts for the taxpayer's overall activity, including nonbusiness income. For example, if only 50% of income is from qualified activity, a 100% credit rate applies only to the related 50% of total tax liability.
What if a corporation's line 7 calculation is greater than 1?
Corporate taxpayers, including insurance companies, must enter 1.0000 on line 7 if line 5 divided by line 6 is greater than 1.