| | | For purposes of this paragraph, "single individual" means a | | taxpayer who files as a single individual, married person | | filing separately or head of household.__For purposes of | | this paragraph, the terms "pensions and annuities," "taxable | | interest," "ordinary dividends" and "capital gains or | | losses" have the same meanings as when used in a comparable | | context in the laws of the United States relating to federal | | income taxes. |
|
| | | Sec. 3. 36 MRSA §5122, sub-§2, śN is enacted to read: |
|
| | | N.__Interest or dividends on obligations or securities of | | this State and its political subdivisions and authorities to | | the extent included in federal adjusted gross income; and |
|
| | | Sec. 4. Application. That section of this Act that repeals and | | replaces the Maine Revised Statutes, Title 36, section 5122, | | subsection 2, paragraph M applies to tax years beginning on or | | after January 1, 2001. |
|
| | | This bill changes the income tax deduction for public pension | | income from $6,000 to $17,500 for persons filing single returns | | and $35,000 for married persons filing jointly and expands the | | deduction to include all pension and annuity income and, for | | taxpayers at least 65 years of age, income from interest, | | dividends and capital gains. Income from social security | | benefits and railroad retirement benefits paid by the Federal | | Government would continue to be exempt from the state income tax. |
|
| | | Under this bill, if the total of social security and railroad | | retirement benefits is at least $17,500 for persons filing single | | returns and $35,000 for married persons filing jointly, then the | | taxpayer is entitled to an income modification equal to the | | actual benefits. If the total of social security and railroad | | retirement benefits taxed at the federal level is less than | | $17,500 for persons filing single returns and $35,000 for married | | persons filing jointly, then the taxpayer also may exempt from | | state income tax an amount, up to a maximum of $17,500 for | | persons filing single returns and $35,000 for married persons | | filing jointly, of social security and railroad retirement | | benefits, pension and annuity income and, for taxpayers at least | | 65 years of age, income from interest, dividends and capital | | gains. |
|
| | | This bill also corrects a conflict created by Public Law 1999, | | chapters 708 and 731, each of which enacted a new Maine Revised | | Statutes, Title 36, section 5122, subsection 2, paragraph M. | | This bill resolves the conflict by reallocating one of the new | | paragraphs to be the Maine Revised Statutes, Title 36, section | | 5122, subsection 2, paragraph N. |
|
|
