18-125 C.M.R. ch. 104 — Rule 104. Filing of Maine Tax Returns

18
DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES
125
MAINE REVENUE SERVICES
Chapter 104: FILING OF MAINE TAX RETURNS
SUMMARY: This rule describes the requirements for filing certain Maine tax returns, including
mandatory electronic filing of certain Maine tax returns, and requirements of software developers to
develop Maine tax return forms.
OUTLINE OF CONTENTS:
.01
Definitions
.02
General filing requirements - individual income tax returns
.03
Mandatory participation
.04
Request for waiver from mandatory participation
.05
Penalties
.06
Software specifications
.07
Application date
.01
Definitions. As used in this rule, unless the context otherwise indicates or may otherwise require,
the following terms have the following meanings that shall apply throughout the rule.
A.
"Electronic filing" or "Electronic data submission" means the submission of return or
document information using a computer, the internet, or any other means of electronic
submission of data in a manner prescribed by the State Tax Assessor ("Assessor") where
the return or document information is electronically accepted by the Assessor.
Specifications for the manner of the transfer of data may be found on the Maine Tax
Portal, Maine Revenue Services ("MRS") website or by contacting MRS.
B.
"Maine tax return" means any Maine tax return for purposes of 36 M.R.S. § 193 (original
or amended return) for which MRS provides a program for electronic filing or electronic
data submission, including, but not limited to, individual income tax returns, sales/use tax
returns, service provider tax returns, income tax withholding returns (Forms 941ME),
pass-through entity withholding returns (Form 941P-ME), real estate withholding
("REW") returns (Forms REW-1-1040, REW-1-1041, REW-1-1120, and REW-5),
corporate income tax returns, real estate transfer tax declarations, franchise tax returns,
insurance tax returns, fuel tax returns (gasoline distributor tax, special fuel tax), special
tax returns, applications for the refundable seed capital investment tax credit by private
venture capital funds, applications for the certified visual media production wage
reimbursement, and returns and reports required to report federal adjustments under 36
M.R.S. §§ 5195-5198.
C.
"Person" means an individual, firm, partnership, association, society, club, corporation,
financial institution, estate, trust, business trust, receiver, assignee, or any other group or
combination acting as a unit, other than the State or Federal Government or any political
subdivision or agency of either government.
18-125 Chapter 104 page 2
D.
"Prepares" means completes Maine tax returns directly or through employees.
E.
"REW filer" means a person, such as a title company, broker, or other REW preparer that
files Maine real estate withholding tax forms pursuant to 36 M.R.S. § 5250-A on behalf
of a buyer or seller of Maine real property.
F.
"Software developer" means a person that develops computer-generated forms or payroll
services that are used in connection with Maine tax laws.
G.
"Special tax" means the blueberry tax, cannabis excise tax, cigarette tax, health care
provider tax, hospital tax, initiator of deposit tax, mahogany quahog tax, milk handling
fee, potato tax, railroad tax, or tobacco tax.
H.
"Tax return preparer or preparer" means a person who prepares Maine tax returns or who
employs one or more persons to prepare Maine tax returns. An employee of a tax return
preparer is not considered a tax return preparer for purposes of this rule.
I.
"Threshold amount" means, for the taxable year, the sum of the applicable Maine
standard deduction amount and the Maine personal exemption amount for each taxpayer
and for each dependent.
.02
General Filing Requirements - individual income tax returns
A.
Resident individuals. Unless an exception applies, a Maine income tax return is required
to be filed by every resident individual:
1.
Who is required to file a federal income tax return for the taxable year; or
2.
Who has a Maine individual income tax liability (before tax credits) for the
taxable year under 36 M.R.S., Part 8.
B.
Exceptions. The following taxpayers who would otherwise be required to file under
subsection A, paragraph 1, above, are not required to file a Maine income tax return:
1.
A resident individual who does not have a Maine income tax liability pursuant
to Part 8 for the taxable year and who filed a federal income tax return for the
taxable year for the sole purpose of claiming a credit under Internal Revenue
Code section 32; and
2.
For taxable years beginning on or after January 1, 2013, a resident individual
whose federal adjusted gross income is less than the applicable threshold amount
and who is not subject to any of the addition modifications under 36 M.R.S. §
5122(1).
.03
Mandatory Participation. The following returns and applications must be submitted by
electronic data submission in accordance with this section, unless a waiver from mandatory participation
under section .04 has been granted:
A.
Individual income tax returns. A tax return preparer must file by electronic data
submission all Maine tax returns for individual income tax, unless:
18-125 Chapter 104 page 3
1.
During the previous calendar year, the tax return preparer prepared 10 or fewer
Maine tax returns for individual income tax; or
2.
The taxpayer refuses to allow the return to be filed by electronic data submission
and the tax return preparer notes the refusal in the taxpayer's records.
B.
Sales, use, and service provider tax returns. A tax return preparer must file all Maine
tax returns for sales, use, or service provider tax by electronic data submission.
C.
Income tax withholding, REW, and pass-through entity withholding returns.
1. Employers that are registered for Maine income tax withholding, third-party filers or
payroll processors as defined in 10 M.R.S., Chapter 222, fiscal agents designated in
accordance with 36 M.R.S. § 5250(5), and non-wage payers that are subject to Maine
income tax withholding under 36 M.R.S. §§ 5255-B and 5255-C must file by
electronic data submission all Maine quarterly returns with respect to Maine income
tax withholding.
2. Pass-through entities with any nonresident members that are subject to pass-through
withholding on Maine-source income must file Form 941P-ME by electronic data
submission.
3. A buyer of real property located in Maine who is required to withhold Maine income
tax under 36 M.R.S. § 5250-A(2), or the REW filer for such buyer, must, for returns
due on or after January 1, 2025, file Forms REW-1-1040, REW-1-1041, and REW-1-
1120 by electronic data submission.
4. A nonresident seller (determined in accordance with the provisions of 36 M.R.S. §
5250-A) of real property located in Maine that submits Form REW-5 to request an
exemption or reduction in the real estate withholding amount, or the REW filer for
such seller, must, for Forms REW-5 submitted on or after May 1, 2025, file Form
REW-5 by electronic data submission.
D.
Corporate income tax returns. Corporations, including tax-exempt entities, required to
file Form 1120ME with total assets of $5 million or more as of the last day of the tax year
must file returns by electronic data submission. For returns filed in calendar year 2025 or
any subsequent calendar year, corporations, including tax-exempt entities, subject to the
tax imposed by 36 M.R.S., Chapter 817 and a tax return preparer for such corporation
that is required to file the federal corporate return electronically for the taxable year must
file Maine Form 1120ME by electronic data submission.
E.
Real estate transfer tax returns. Starting with returns filed in calendar year 2021, a tax
return preparer must file by electronic data submission all Maine tax returns for real
estate transfer tax, except where the tax return preparer prepared fewer than 10 Maine tax
returns for real estate transfer tax in the previous calendar year.
18-125 Chapter 104 page 4
F.
Franchise tax returns. Starting with returns filed in calendar year 2025, a financial
institution subject to the tax imposed by 36 M.R.S., Chapter 819 and a tax return preparer
for such financial institution must file by electronic data submission all Maine tax returns
for franchise tax.
G.
Insurance premiums tax returns. Starting with returns filed in calendar year 2025, a
person subject to the taxes imposed by 36 M.R.S., Chapter 357, or 25 M.R.S. § 2399, and
a tax return preparer for such person, must file by electronic data submission all Maine
tax returns required by 36 M.R.S. §§ 2521-A and 2531(3).
H.
Fuel tax returns. Starting with returns filed in calendar year 2025, a tax return preparer
must file by electronic data submission all Maine gasoline distributor and/or special fuel
supplier tax returns, including the annual shrinkage returns and schedules.
I.
Special tax returns. Starting with returns filed in calendar year 2025, a tax return
preparer must file by electronic data submission all Maine special tax returns.
J.
Applications for the refundable seed capital investment tax credit by private
venture capital funds under 36 M.R.S. § 5216-B(2). Starting with applications filed in
calendar year 2025 for investments made in calendar year 2024 or later, a private venture
capital fund and a tax return preparer for such fund must file by electronic data
submission all applications for the refundable seed capital investment tax credit under 36
M.R.S. § 5216-B(2).
K.
Applications for the certified visual media production wage reimbursement under
36 M.R.S., Chapter 919-A. Starting with applications filed in calendar year 2025, a
visual media production company and a tax return preparer for such company must file
by electronic data submission all applications for the certified visual media production
wage reimbursement under 36 M.R.S., Chapter 919-A.
L.
Income tax returns for estates and trusts. Starting July 1, 2025, a tax return preparer
must file by electronic data submission all Maine income tax returns for estates and
trusts, unless during the previous calendar year, the tax return preparer prepared 10 or
fewer Maine income tax returns for estates and trusts.
M.
Partnership audit returns and reports. Starting January 1, 2026, a partnership
required to report federal adjustments under §§ 5195-5198, and the tax return preparer or
state partnership representative for such partnership, must file by electronic data
submission all Maine tax returns and reports required to be filed pursuant to 36 M.R.S. §§
5195-5198.
.04
Request for Waiver from Mandatory Participation
The Assessor shall waive the mandatory participation requirement under section .03 where the
Assessor determines that the requirement may cause undue hardship. A person subject to
mandatory participation under this rule may request a waiver from participation by submitting a
waiver request in writing that indicates with specificity the tax type for which the waiver is
requested, the undue hardship that will result from compliance with the electronic filing
requirements, and the date by which the person intends to be in compliance. A determination by
18-125 Chapter 104 page 5
the Assessor under this section is subject to the administrative appeal provisions of 36 M.R.S. §
151.
.05
Penalties
Any person that fails to file returns by electronic data submission as required by this rule is liable
for the penalty under 36 M.R.S. § 187-B(5-B). The Assessor shall waive or abate penalties for
reasonable cause pursuant to 36 M.R.S. § 187-B(7). A determination by the Assessor under this
section is subject to the administrative appeal provisions of 36 M.R.S. § 151.
.06
Software Specifications
Software developers are required by this rule to include 2-D barcodes pursuant to MRS
specifications on all Maine substitute forms produced by the software developer. The Assessor
shall waive the mandatory participation requirement under section .03 where the Assessor
determines that the requirement may cause undue hardship. A software developer subject to this
section may request a waiver from participation by submitting a waiver request in writing that
indicates with specificity the undue hardship that will be caused by complying with this section. A
determination by the Assessor under this section is not subject to the administrative appeal
provisions of 36 M.R.S. § 151.
.07
Application date
Except where otherwise stated, this Rule applies to tax periods beginning on or after
January 1, 2016.
STATUTORY AUTHORITY: 36 M.R.S. §§ 193, 5220(7)
EFFECTIVE DATE:
February 11, 2008 - filing 2008-68
AMENDED:
November 21, 2008
December 16, 2008 - filing 2008-576
March 1, 2010 - filing 2010-49
October 31, 2010 - filing 2010-522
October 21, 2012 - filing 2012-289
April 22, 2013 - filing 2013-101
January 31, 2016 - filing 2016-013
October 8, 2016 - filing 2016-164
August 28, 2017 - filing 2017-130
July 4, 2021 - filing 2021-142
April 27,2024 - filing 2024-090
August 4, 2024 - filing 2024-171
February 25, 2025 - filing 2025-034