LD 332
pg. 1
LD 332 Title Page An Act To Exempt Unemployment Benefits from State Income Tax Page 2 of 2
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LR 1549
Item 1

 
Emergency preamble. Whereas, acts of the Legislature do not become
effective until 90 days after adjournment unless enacted as
emergencies; and

 
Whereas, unemployment benefits are currently subject to Maine
income tax; and

 
Whereas, unemployment benefits are usually less than the amount
the unemployed person was earning; and

 
Whereas, income tax on unemployment benefits further reduces the
amount of income to those persons who are unemployed, thereby
adding further pecuniary injury; and

 
Whereas, in the judgment of the Legislature, these facts create
an emergency within the meaning of the Constitution of Maine and
require the following legislation as immediately necessary for
the preservation of the public peace, health and safety; now,
therefore,

 
Be it enacted by the People of the State of Maine as follows:

 
Sec. 1. 36 MRSA §5122, sub-§2, ¶Q, as corrected by RR 2003, c. 1, §38,
is amended to read:

 
Q. A fraction of any amount previously added back by the
taxpayer to federal adjusted gross income pursuant to
subsection 1, paragraph N.

 
(1) With respect to property first placed in service
during taxable years beginning in 2002, the adjustment
under this paragraph is available for each year during
the recovery period, beginning 2 years after the
beginning of the taxable year during which the property
was first placed in service. The fraction is equal to
the amount added back under subsection 1, paragraph N
with respect to the property, divided by the number of
years in the recovery period minus 2.

 
(2) With respect to all other property, for the
taxable year immediately following the taxable year
during which the property was first placed in service,
the fraction allowed by this paragraph is equal to 5%
of the amount added back under subsection 1, paragraph
N with respect to the property. For each subsequent
taxable year during the recovery period, the fraction
is equal to 95% of the amount added back under
subsection 1, paragraph N with respect to the property,
divided by the number of years in the recovery period
minus 2.


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