Seed Capital Investment Tax Credit: Seed Capital Investment Tax Credit (2024)
Maine · Maine Revenue Services · Used for tax years 2024
The Maine Seed Capital Investment Tax Credit Worksheet for 2024 calculates the credit available for eligible investments in Maine businesses. It reports the current-year credit, unused credits carried forward, amounts available for future years, and any recapture when FAME revoke
Who files this form
Use this worksheet to claim the Maine Seed Capital Investment Tax Credit for tax year 2024. Enclose it with Form 1040ME, Form 1041ME, or Form 1120ME.
The credit applies to eligible investments certified by the Finance Authority of Maine (FAME). Owners of pass-through entities that make eligible investments may claim a credit in proportion to their interests in the entity.
Private venture capital funds claiming this credit must email corporate.tax@maine.gov for special instructions.
What you'll need
- Copies of the FAME credit certificates for investments included on lines 1 through 4. Attach the certificates to your tax return.
- Your 2023 Seed Capital Investment Tax Credit worksheet if you have unused credit to carry forward. Line 6 refers to line 10 of that worksheet.
- Your applicable Maine return, Form 1040ME, Form 1041ME, or Form 1120ME, to calculate the tax-based credit limit.
- Your taxpayer name, EIN or SSN, and the name of the business invested in.
- If claiming through a pass-through entity, its name, EIN or SSN, your ownership percentage for the tax year, and a copy of the federal Schedule K-1 it issued to you.
Maine Revenue Services may request additional information supporting the credit before processing the return.
How to file
- Enter your taxpayer information and the name of the business invested in.
- On lines 1 through 4, enter the credit certificate amounts for investments made in 2021 through 2024, respectively, and multiply each by 25%. Add the results on line 5.
- Enter eligible unused credit carried forward on line 6, then add lines 5 and 6 on line 7.
- Calculate 50% of your tax before credits on line 8, using the return lines printed on the worksheet. Enter the smaller of lines 7 and 8 on line 9.
- Transfer line 9 to Form 1040ME, Schedule A, line 14; Form 1041ME, Schedule A, line 8; or Form 1120ME, Schedule C, line 1a.
- Complete the carryover, future-year credit, and recapture lines as applicable.
- Enclose the worksheet with your Maine return and attach the required certificate copies and, if applicable, federal Schedule K-1.
The text does not provide a mailing address or e-file instructions.
Common mistakes
- Forgetting to attach a copy of the credit certificate to the tax return.
- For a pass-through credit, leaving out the entity's name, identification number, ownership percentage, or federal Schedule K-1.
- Carrying unused credit beyond the 15-year carryover period.
- For a private venture capital fund, overlooking the special instructions. Email corporate.tax@maine.gov. These funds may claim the credit in the calendar year following the year of investment.
- Overlooking possible recapture when FAME revokes a certificate. The recapture amount is included as additional tax on the Maine return.
Questions people ask
How much credit can I use each year?
Generally, 25% of the authorized credit may be used in each of four tax years, beginning with the investment year. The credit used in any one year is limited to 50% of your tax liability before credits. Private venture capital funds have special timing rules.
Can I carry unused credit forward?
Yes. Unused credit may be carried forward for up to 15 years. Line 10 records the carryover to the next year.
What happens if FAME revokes my credit certificate?
Subtract the credit not yet claimed from the amount revoked. A positive result is a recapture amount reported as additional tax. A negative result represents credit still available, as stated on line 12c.
Who can answer questions about qualifying investments?
Call FAME at 1-800-228-3734. The worksheet also directs taxpayers to famemaine.com for more information.