How to Claim the Maine Property Tax Fairness Credit

The Maine Property Tax Fairness Credit (PTFC) is a refundable state tax credit available to eligible Maine residents. It is designed to provide relief to both homeowners and renters who pay property taxes or rent on their primary residence in Maine. Because it is a refundable credit, you can receive it as a payment even if you do not owe any Maine income tax.

Determining Your Eligibility

To qualify for the Property Tax Fairness Credit, you must meet several requirements. You must have been a Maine resident for any part of the tax year, and the property must have been your principal residence in Maine.

Your eligibility is also tied to specific income thresholds that vary by filing status. For the 2024 tax year, a single filer’s Maine Adjusted Gross Income (AGI) must be less than $61,250. If you file as head of household, the limit is $80,000 with one dependent or $97,500 with more than one. For those married filing jointly, the income cap is $80,000 with no dependents or $97,500 with one or more dependents.

Finally, your property tax paid must be more than 4% of your income, or your rent paid must exceed 26.67% of your income. Individuals using the married filing separately status are not eligible for this credit.

Calculating the Credit Amount

The calculation begins with determining your “benefit base.” For homeowners, this is the total property tax paid on your primary residence. For renters, the benefit base is 15% of the total rent paid, which represents the portion of rent estimated to cover property taxes.

Next, this benefit base is reduced by 4% of your Maine Adjusted Gross Income (AGI). For example, if your benefit base is $2,500 and your AGI is $40,000, your income contribution is $1,600 ($40,000 x 0.04). The initial credit would then be $900 ($2,500 – $1,600).

The final credit amount is subject to a maximum limit. For the 2024 tax year, the maximum credit is generally $1,500, but it increases to $2,000 for claimants who are 65 or older. If your calculated credit exceeds the applicable maximum, you will receive the maximum amount.

Information and Forms for Claiming the Credit

To claim the Property Tax Fairness Credit, you must complete and file Maine Schedule PTFC. Before you begin, gather all the necessary information to ensure accuracy.

You will need several key pieces of data, including:

• The total amount of property tax you paid on your primary residence for the calendar year, which can be found on your property tax bill.
• If you are a renter, the total rent paid for the year and the full name and mailing address of your landlord.
• Your Maine Adjusted Gross Income, which is calculated on Form 1040ME.
• The number of qualifying dependents you claim.

The Schedule PTFC form can be downloaded from the Maine Revenue Services website. The form guides you through the calculation steps to find your final credit amount.

How to File for the Credit

The completed Schedule PTFC must be submitted with your Maine Individual Income Tax Return, Form 1040ME. The schedule is an attachment, not a standalone document, and the credit amount is entered on the appropriate line of Form 1040ME.

The most common method is electronic filing through tax preparation software or a tax professional. These programs will help determine your eligibility and automatically complete and file the necessary forms with your return.

Alternatively, you can file a paper return by mail. You must print and attach the completed Schedule PTFC to your Form 1040ME and mail the package to the address specified in the form instructions. Once your return is processed, the credit will be applied to any tax you owe, and any remaining amount will be issued to you as a refund.