Maine Form 1040ME

Residency Status

Domicile: Domicile is the place an individual establishes as his or her permanent home and includes the place to which he or she intends to return after any period of absence. A number of factors associated with residency are relevant in the evaluation of a claimed domicile. A domicile,

once established, continues until a new, fixed and permanent home is acquired. To change domicile, a taxpayer must exhibit actions consistent with a change. No change of domicile results from moving to a new location if the intent is to remain only for a limited time, even if it is for a

relatively long duration.

RESIDENCY WORKSHEET

􀂆Full-Year Resident:

(1) Maine was my domicile for the entire year of 2009;

OR

(2) I maintained a permanent place of abode in Maine for the entire year and spent a total of more than 183 days in Maine.

􀂆“Safe Harbor" Resident:

General Safe Harbor - Maine was my domicile in 2009, I did not maintain a permanent place of abode in Maine, I maintained a permanent place of abode outside Maine and I spent no more than

30 days of 2009 in Maine. Individuals qualifying under the safe harbor rule will be treated as a nonresident for Maine individual income tax purposes. IF YOU ARE A “SAFE-HARBOR” RESIDENT, YOU MUST FILE FORM 1040ME WITH SCHEDULE NR OR NRH.

􀂆Part-Year Resident:

I was domiciled in Maine for part of the year and was not a full-year resident as defined in (2) above.

IF YOU ARE A PART-YEAR RESIDENT, YOU MUST FILE FORM 1040ME WITH SCHEDULE NR OR NRH.

􀂆Nonresident:

I was not a resident or part-year resident in 2009, but I do have Maine-source income. Note: If you fi led as a nonresident alien on your federal income tax return, file as a nonresident alien on

your Maine income tax return, Form 1040ME. Follow the federal filing requirements for filing status, number of exemptions, federal adjusted gross income, and itemized deductions.

IF YOU ARE A NONRESIDENT, YOU MUST FILE FORM 1040ME WITH SCHEDULE NR OR NRH.

Direct Deposit of Refund

You may have your refund directly deposited into your checking or savings account (if it is $10,000 or less) or to an existing NextGen College Investing Plan® Account (NextGen Account). The NextGen Program is administered by the Finance Authority of Maine. ENTRIES MUST

BE ACCURATE.

Routing Number (“RTN”): The routing number must be 9 digits. The RTN must begin with 01 through 12 or 21 through 32. If it does not, the direct deposit will be rejected and a refund

check will be sent instead. (NOTE: If you are directing your refund to your NextGen Account, enter the following RTN: 043000261).

Bank Account or NextGen Account Number: Your account number can be up to 17 characters (both numbers and letters). Include hyphens, but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. NOTE: For NextGen Accounts, the account number is the account owner’s 9-digit social security number. If your account number is listed incorrectly or is invalid, the direct deposit will be rejected and a refund check will be sent instead.

Maine Schedules 1 and 2

Maine State Retirement Contributions

Amounts entered on W-2’s, box 14 with “MSRS” as the type will be used to calculate this addition.

Domestic Production Activities Deduction Add-Back

Enter the amount claimed as a domestic production activities deduction on federal Form 1040, line 35.

Section 179 Expense Add-back

Federal adjusted gross income must be increased by the net effect of the increase in section 179 expense due to federal law changes in Section 202 of the federal Jobs and Growth Tax Relief Reconciliation Act of 2003, Public Law 108-27. The amount of this modification is determined by first recalculating the section 179 expense on federal Form 4562 exclusive of all section 179 expense increases. Enter on line 1e the difference between this recalculated section 179 expense amount and the original section 179 expense claimed for federal income tax purposes. If the difference is less than zero, enter zero.

Discharge of Indebtedness Deferred for Federal tax Purposes

Enter the amount of discharge of indebtedness deferred for federal income tax purposes in accordance with Code § 108(i).

Pension Income Deduction

If the pension received is from military sources, enter "M" in field US048240 for the state distribution on line 10 of the 1099R on the federal return. If the pension is from non-military sources, leave field US048240 blank. Military pensions carry to line 6 of the Pension Income Deduction Worksheet. Non-military pensions carry to line 1.

Long-term Care Insurance Premiums Deduction

Enter on this line premiums paid for long-term care insurance. To qualify, the insurance

policy on which the premiums are paid 1) must meet the federal definition for a long-term care insurance contract (IRC § 7702B(b)) (these are longterm care premiums that generally qualify for federal itemized deductions), or 2) must be certified by the Maine Bureau of Insurance. Premiums

claimed must be reduced by any premiums claimed as Maine itemized deductions and by any premiums included in the federal self-employed health insurance deduction claimed on federal Form 1040, line 29.

Bonus Depreciation/Section 179 Expense Recapture

Amounts required to be added to income under 36 M.R.S.A. § 5122(1)(N) (36 M.R.S.A. § 5200-A(1)(N) with respect to individual owners of certain electing S corporations) may be recaptured over the life of the applicable asset. For property placed in service in 2002, addition modifications

may be recaptured in equal amounts over the remaining life of the asset beginning in 2004. For assets placed in service after 2002, 5% of the addition modification is recaptured in the tax year immediately following the year the asset was placed in service, with the remaining 95% recovered in subsequent tax years, in equal installments, over the remaining life of the applicable asset. This calculation must be entered manually. It cannot be calculated by the software.

Nonresident Servicemember Military Income

The Servicemembers Civil Relief Act signed in late 2003, prevents the states from including the military compensation of a nonresident servicemember in total income when computing the tax on nonresidents.

Since Maine includes this income in the federal AGI on Form 1040ME, line 14, this amount needs to be entered as a subtraction on Schedule 1. Include the amount of military compensation of the nonresident servicemember on the statement for Schedule 1, line 2k.

This amount also needs to be included on Worksheet B, line 1, columns A and D. This will ensure the proper determination of non-Maine source income.