An Act To Provide Tax Relief to Working Families
Maine Legislature, Session 123, LD 0131
Committee: Taxation
Sponsors: HAYES, STRIMLING, BARSTOW, CANAVAN, CRAVEN, PIOTTI, SAMSON, SUTHERLAND, WAGNER, WATSON
Amends: 36 MRSA §5126, 36 MRSA §5218, 36 MRSA §5219-B

Legislative Document 
No. 131 
H.P. 123 
House of Representatives, January 9,2007 
An Act To Provide Tax Relief to Working Families 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative HAYES of Buckfield. 
Cosponsored by Senator STRIMLING of Cumberland and 
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frJ.11!d£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BARSTOW of Gorham, CANAVAN of Waterville, CRAVEN of Lewiston, 
PIOTTI of Unity, SAMSON of Auburn, SUTHERLAND of Chapman, WAGNER of 
Lewiston, WATSON of Bath. 
Printed nil recYl:leJ. paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §5126, first ~, as amended by PL 200 I, c. 583, § 16, is further 
amended to read: 
For income tax years beginning on or after January I, 1998 but before January I, 
1999, a resident individual is allowed $2,400 for each exemption that the individual 
properly claims for the taxable year for federal income tax purposes, unless the taxpayer 
is claimed as a dependent on another return. For income tax years beginning on or after 
January 1, 1999 but before January 1, 2000, a resident individual is allowed $2,750 for 
each exemption that the individual properly claims for the taxable year for federal income 
tax purposes, unless the taxpayer is claimed as a dependent on another return. 
For 
income tax years beginning on or after January 1, 2000 but before January 1, 2007, a 
resident individual is allowed $2,850 for each exemption that the individual properly 
claims for the taxable year for federal income tax purposes, unless the taxpayer is claimed 
as a dependent on another return. For income tax years beginning on or after January I, 
2007, a resident individual is allowed $3,200 for each exemption that the individual 
properly claims for the taxable year for federal income tax purposes, unless the taxpayer 
is claimed as a dependent on another return. 
Sec. 2. 36 MRSA §5218, as amended by PL 2005, c. 519, Pt. DO, §§I to 3, is 
further amended to read: 
§5218. Income tax credit for child care expenses 
1. Resident taxpayer. A resident individual is allowed a credit against the tax 
otherwise due under this Part in the amount of ~ 
100% of the federal tax credit 
allowable for child and dependent care expenses in the same tax year, except that for tax 
years beginning in 2003, 2004 and 2005, the applicable percentage is 21.S% instead of 
~. 
2. Nonresident taxpayer. A nonresident individual is allowed a credit against the 
tax otherwise due under this Part in the amount of ~ 
100% of the federal tax credit 
allowable for child and dependent care expenses multiplied by the ratio of the individual's 
Maine adjusted gross income, as defined in section 5102, subsection I-C, paragraph B, to 
the individual's entire federal adjusted gross income, as modified by section 5122, except 
that for tax years beginning in 2003, 2004 and 200S, the applicable percentage is 21.S% 
instead of 2S%. 
2-A. Part-year resident taxpayer. An individual who files a return as a part-year 
resident in accordance with section 5224-A is allowed a credit against the tax otherwise 
due under this Part in the amount of 2S%, except that for tax years beginning in 2003, 
2004 and 2005 the applicable percentage is 21.S%, instead of 2S%, 100% of the federal 
tax credit allowable for child and dependent care expenses multiplied by a ratio, the 
numerator of which is the individual's Maine adjusted gross income as defined in section 
5102, subsection I-C, paragraph A for that portion of the taxable year during which the 
individual was a resident plus the individuai's Maine adjusted gross income as defined in 
section 5102, subsection I-C, paragraph B for that portion of the taxable year during 
Page I - 123LR04S8(Ol)-1 
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II 
which the individual was a nonresident and the denominator of which is the individual's 
entire federal adjusted gross income, as modified by section 5122. 
3. Quality ehild eaFe sen'iees. The credit provided by subsections I, 2 and 2 A 
doubles in amount if the child care expenses were incurred through the use of quality 
child care services as defined in section 5219 Q, subsection 1. 
4. Refund. The credit allowed by this section may result in a refund of up to $500. 
In the case of a nonresident individual, the refundable portion of the credit may not 
exceed $500 multiplied by the ratio of the individual's Maine adjusted gross income, as 
defined in section 5102, subsection l-C, paragraph B, to the individual's entire federal 
adjusted gross income, as modified by section 5122. In the case of an individual who 
files a return as a part-year resident in accordance with section 5224-A, the refundable 
portion of the credit may not exceed $500 multiplied by a ratio, the numerator of which is 
the individual's Maine adjusted gross income as defined in section 5102, subsection l-C, 
paragraph A for that portion of the taxable year during which the individual was a 
resident plus the individual's Maine adjusted gross income as defined in section 5102, 
subsection I-C, paragraph B for that portion of the taxable year during which the 
individual was a nonresident and the denominator of which is the individual's entire 
federal adjusted gross income, as modified by section 5122. 
Sec. 3. 36 MRSA §5219-BB is enacted to read: 
§5219-BB. Child tax credit 
1. Resident taxpayer. A resident individual is allowed a credit against the tax 
otherwise due under this Part in the amount of 100% of the federal child tax credit. 
2. Nonresident taxpayer. A nonresident individual is allowed a credit against the 
tax otherwise due under this Part in the amount of 100% of the federal child tax credit 
multiplied bv the ratio of the individual's Maine adjusted gross income, as defined in 
section 5102, subsection l-C, paragraph B, to the individual's entire federal adjusted 
gross income, as modified by section 5122. 
3. Part-year resident taxpayer. An individual who files a return as a part-year 
resident in accordance with section 5224-A is allowed a credit against the tax otherwise 
due under this Part in the amount of 100% of the federal child tax credit multiplied bv a 
ratio, the numerator of which is the individual's Maine adjusted gross income as defined 
in section 5102, subsection I-C, paragraph A for that portion of the taxable vear during 
\vhich the individual was a resident plus the individual's Maine adjusted gross income as 
defined in section 5102, subsection l-C, paragraph B for that portion of the taxable year 
during which the individual was a nonresident and the denominator of which is the 
individual's entire federal adjusted gross income, as modified by section 5122. 
Sec. 4. Application. That section of this Act that amends the Maine Revised 
Statutes, Title 36, section 5126 applies to tax years beginning on or after January 1,2007. 
That section of this Act that amends Title 36, section 5218 and that section that enacts 
Title 36, section 5219-BB apply to tax years beginning on or after January 1, 2008. 
SUMMARY 
This bill is a recommendation of the Study Commission Regarding Liveable Wages 
established in Resolve 2005, chapter 128. The bill amends Maine's tax laws to achieve 
conformity with federal tax laws regarding the child care credit, personal exemption and 
child tax credit. 
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