Maine Tax Guide 2026

Personal income tax

36 M.R.S. §5111 sets 3 brackets for 2026 single filers: • 5.8% on first $26,800 • 6.75% from $26,800 to $61,600 • 7.15% above $61,600 MFJ brackets are exactly doubled: $53,600 and $123,250. Standard deduction conforms to federal — $15,000 single / $30,000 MFJ for 2026 (36 M.R.S. §5124-C). Personal exemption replaced by personal exemption credit ($300/person if Maine taxable < threshold). No state-level QBI deduction (Maine adds back the federal §199A deduction). No state-level AMT. Social Security: 100% EXEMPT from Maine income tax.

Pension exclusion and retirement

36 M.R.S. §5122(2)(M-2) excludes from Maine taxable income up to $45,864 per person (2024 base, indexed for 2026 — verify current figure with state) of: • Eligible pension income (defined benefit, IRA, 401(k), 403(b), 457 distributions) • Reduced dollar-for-dollar by Social Security received (the exclusion is meant to provide TOTAL non-SS-retirement-income exclusion roughly equivalent to typical pension + SS) For a Maine retiree with $30,000 Social Security + $40,000 IRA: $45,864 cap − $30,000 SS = $15,864 of IRA excluded; $24,136 taxable. Military pension: 100% EXEMPT separately (Maine joins about 30 states fully exempting military retirement).

Sales tax — clean and uniform

State sales tax 5.5% (36 M.R.S. §1811). NO LOCAL SALES TAX statewide — Maine is one of the cleanest sales-tax systems in the country. Special rates: • Prepared food (restaurant meals): 8% • Lodging (hotels, B&Bs, short-term rentals): 9% • Liquor, beer, wine: 8% (in addition to excise) • Auto rentals (short-term): 10% Groceries: EXEMPT. Prescription drugs: exempt. Clothing: TAXABLE. Most services: exempt except specified taxable services (e.g., telecommunications, cable, transient lodging). Economic nexus (36 M.R.S. §1754-B(1-B)): $100,000 in cumulative sales (transaction count eliminated by 2021 reform).

Property tax and homestead

Statewide average effective ~1.09% — close to national average. Cumberland County (Portland): ~1.30%, York ~1.07%, Penobscot (Bangor) ~1.31%, Kennebec (Augusta) ~1.36%. Homestead exemption (36 M.R.S. §681): $25,000 reduction from assessed value for primary residence (must own and occupy for 12 months). Property Tax Fairness Credit: refundable income tax credit (up to $1,500–$2,000) for qualifying low/middle-income homeowners and renters. Veteran property tax exemption: $6,000 (more for paraplegic or 100% disabled veterans). LD 290 and similar legislation continues to debate further homestead expansion.

Estate tax and other levies

Maine estate tax (36 M.R.S. §4102): 8%–12% on taxable estate above the exemption. Exemption: $6.8M for decedents dying in 2024 (indexed annually); approximately $7M for 2026 (verify current). Cliff effect mitigated post-2013 reform — gradual tax base. Unlike federal estate tax with $15M exemption and portability, Maine has NO PORTABILITY between spouses — first-to-die's unused exemption is lost. Maine estate planning often uses bypass trusts for couples with combined estates between $7M and federal exemption. No Maine gift tax. Maine 3-year lookback for gifts. No inheritance tax. Corporate income tax (36 M.R.S. §5200): 4-bracket 3.5%/7.93%/8.33%/8.93%, top rate above $3.5M. LLC fee: $85 annual report (36 M.R.S. §6759 / 31 M.R.S.). PTET: Available under 36 M.R.S. §5200-D — entity-level workaround at top individual rate (7.15%) with refundable credit.

Worked example: Eleanor Whitfield, Portland-based author (single, 2026)

Eleanor operates a single-member LLC publishing royalties business. Net SE income $145,000. Also receives $18,000 Social Security (early retirement) and $32,000 pension from a former teaching job. Owns a $475,000 Portland home.

Federal: SE tax + federal income tax + §199A 20% QBI (writers/authors generally non-SSTB) → moderately high federal liability. Maine state: W-2 + SE income: $145,000 Social Security: $18,000 (Maine exempts SS) Pension: $32,000 Maine pension exclusion ($45,864 − $18,000 SS = $27,864 available) → covers $27,864 of the $32,000 pension → $4,136 pension taxable. Maine AGI: $145,000 + $4,136 = $149,136 Less standard deduction: $15,000 Maine adds back federal QBI ($29,000) → +$29,000 Maine taxable: $163,136 Tax: $26,800 × 5.8% = $1,554 $34,800 × 6.75% = $2,349 $101,536 × 7.15% = $7,260 Total: $11,163 Property tax on $475k Portland home (after $25k homestead) @ ~1.30% = $5,850/yr Maine state burden: ~$11,163 (plus property).

Statute references

• Personal income tax brackets (top 7.15%) — 36 M.R.S. §5111
• Standard deduction (federal conformity) — 36 M.R.S. §5124-C
• Pension income exclusion ($45,864) — 36 M.R.S. §5122(2)(M-2)
• Sales tax 5.5% — 36 M.R.S. §1811
• Economic nexus (Wayfair) — 36 M.R.S. §1754-B(1-B)
• Homestead exemption — 36 M.R.S. §681
• Corporate income tax — 36 M.R.S. §5200
• Estate tax (8%–12%) — 36 M.R.S. §4102
• PTET election — 36 M.R.S. §5200-D

Related pages

• State Tax Comparison →
• Estate Tax Calculator →
• QBI §199A Deduction →