Maine State Income Tax Rates and Brackets for 2025 Explained

Key Takeaways

• Maine’s 2025 income tax rates range from 5.8% to 7.15% with inflation-adjusted brackets.
• Proposed changes may lower starting rates and raise corporate tax to 10% in 2026.
• Residents, newcomers, and businesses must use current rates for 2025 tax filings.

Maine’s state income tax system is a key consideration for anyone living, working, or planning to move to the state. As of July 9, 2025, Maine continues to use a graduated income tax system, meaning the rate you pay depends on how much money you earn. However, lawmakers are discussing possible changes that could affect both individuals and businesses in the near future. This update explains what has changed, who is affected, when changes might take effect, what actions you may need to take, and what these changes could mean for pending applications or future tax filings.

Summary of What Changed

For the 2025 tax year, Maine’s state income tax rates and brackets remain as they were in previous years, but there are important updates and proposals under consideration:

• Current tax rates for individuals: 5.8% to 7.15%, depending on income.
• Inflation adjustments: The state has adjusted the tax brackets for inflation, so the income ranges for each bracket are slightly higher than in previous years.
• Proposed changes: Lawmakers are considering new tax brackets and rates, including a lower starting rate and higher rates for top earners.
• Corporate tax proposal: There is a plan to raise the top corporate tax rate from 8.93% to 10% starting in 2026, mainly to support agriculture programs.

Let’s break down these updates in detail and explain what they mean for residents, newcomers, and businesses in Maine.

Current State Income Tax Rates and Brackets in Maine for 2025

Maine’s income tax system is “graduated,” which means the more you earn, the higher the percentage of your income you pay in taxes. For the 2025 tax year, the state income tax rates and brackets are:

• 5.8% on taxable income less than $40,200
• 6.75% on taxable income between $40,200 and $95,150, plus $2,332
• 7.15% on taxable income over $95,150, plus $6,041

These rates apply to individual taxpayers. If you are married and filing jointly, the income brackets may be different, so it’s important to check the latest information from Maine Revenue Services.

Inflation Adjustments to Tax Brackets

Every year, Maine adjusts its tax brackets to account for inflation. This means the income ranges for each tax rate go up a little bit to keep up with the rising cost of living. For 2025, these adjustments help make sure that people don’t move into a higher tax bracket just because of inflation, not because they actually earned more money.

Who Is Affected by These Rates?

• Residents of Maine: Anyone who lives in Maine for most of the year and earns income is subject to these state income tax rates.
• Non-residents with Maine income: If you work in Maine but live elsewhere, you may still need to pay Maine state income tax on the money you earn in the state.
• New immigrants and newcomers: If you have recently moved to Maine, you will need to understand these tax brackets to plan your finances.
• Businesses: While these rates apply to individuals, businesses should also pay attention, especially with proposed changes to corporate tax rates.

Proposed Changes to Maine’s State Income Tax Rates and Brackets

Lawmakers in Maine are discussing several proposals that could change the state income tax system in the coming years. These proposals are not yet law, but it’s important to know what might be coming:

• Lower starting rate: One proposal would reduce the lowest tax rate from 5.8% to 5.5% for people with the lowest taxable incomes.
• New higher brackets: There are suggestions to add new tax brackets for higher earners, with rates of 7.75% or even higher for those with the largest incomes.
• Corporate tax increase: For businesses, there is a proposal to raise the top corporate tax rate from 8.93% to 10% starting in 2026. This is part of a bill called LD 1879, which aims to fund agriculture programs in Maine.

Effective Dates for Proposed Changes

• Individual tax rates: As of July 9, 2025, no changes have been finalized. The current rates and brackets apply for income earned in 2024 and reported on tax returns filed in 2025.
• Corporate tax rates: If the proposal passes, the new 10% top corporate tax rate would take effect for tax years starting on or after January 1, 2026.

Required Actions for Taxpayers

If you live or work in Maine, here’s what you need to do:

• For 2025 tax filings: Use the current tax brackets and rates when preparing your state income tax return for income earned in 2024.
• Stay informed: Keep an eye on news from Maine Revenue Services and the state legislature for any updates about changes to tax rates or brackets.
• Plan for the future: If you are a high earner or a business owner, consider how possible changes to tax brackets or corporate tax rates could affect your finances in 2026 and beyond.
• Consult a tax advisor: If you’re unsure how these changes might affect you, or if you have special circumstances (such as moving to Maine from another country), talk to a tax professional.

Implications for Pending Applications and Immigration

For immigrants and newcomers to Maine, understanding state income tax rates and brackets is important for several reasons:

• Visa and residency applications: Some immigration processes require proof of income or tax compliance. Knowing the correct tax rates helps you prepare accurate documents.
• Financial planning: If you are moving to Maine for work or study, understanding how much state income tax you will pay helps you budget for living expenses.
• Business investment: If you are starting a business or investing in Maine, the proposed increase in corporate tax rates could affect your plans.

How Maine’s Tax System Works for Newcomers

If you are new to Maine, here’s a simple overview of how the state income tax system works:

1. Determine your residency status: Are you a full-year resident, part-year resident, or non-resident? This affects how much of your income is taxed by Maine.
2. Calculate your taxable income: Start with your total income, subtract any deductions or exemptions, and the result is your taxable income.
3. Apply the tax brackets: Use the current Maine state income tax brackets to figure out how much tax you owe.
4. File your tax return: You must file a Maine state income tax return each year, usually by April 15.

Example Scenarios

Let’s look at a few examples to see how the Maine state income tax rates and brackets work in practice:

• Example 1: Single worker earning $35,000
  • Taxable income: $35,000
  • Tax rate: 5.8%
  • State income tax owed: $2,030
• Example 2: Single worker earning $60,000
  • Taxable income: $60,000
  • First $40,200 taxed at 5.8% = $2,332
  • Remaining $19,800 taxed at 6.75% = $1,336.50
  • Total state income tax owed: $2,332 + $1,336.50 = $3,668.50
• Example 3: Single worker earning $120,000
  • Taxable income: $120,000
  • First $95,150 taxed as above = $6,041
  • Remaining $24,850 taxed at 7.15% = $1,777.78
  • Total state income tax owed: $6,041 + $1,777.78 = $7,818.78

These examples show how the Maine state income tax brackets work for different income levels.

What If the Proposed Changes Pass?

If lawmakers approve the proposed changes, here’s what could happen:

• Lower rates for some: People with lower incomes could pay less in state income tax if the starting rate drops from 5.8% to 5.5%.
• Higher rates for top earners: People with very high incomes could pay more if new brackets with rates of 7.75% or higher are added.
• Businesses pay more: Companies with large profits could see their state corporate tax bills rise if the top rate increases to 10% in 2026.

Why Are These Changes Being Considered?

Maine’s government is looking at these changes for several reasons:

• Support for agriculture: The proposed corporate tax increase is meant to fund programs that help farmers and the agriculture industry in Maine.
• Fairness and revenue: Lawmakers want to make sure the tax system is fair and brings in enough money to pay for state services.
• Economic growth: Some experts worry that higher taxes could slow down business investment or make it harder for people to afford living in Maine.

Expert Opinions

According to analysis from VisaVerge.com, any changes to Maine’s state income tax rates and brackets should be carefully studied to see how they affect both individuals and the state’s economy. While the goal is to support important programs and keep the tax system fair, it’s important to make sure that changes do not hurt economic growth or make Maine less attractive to new residents and businesses.

Where to Find Official Information

For the most up-to-date and official information about Maine’s state income tax rates, brackets, and any proposed changes, visit the Maine Revenue Services website. This site provides forms, instructions, and contact information for anyone with questions about Maine taxes.

If you need to file your Maine state income tax return, you can find the official forms and instructions on the same website. For example, the Maine Individual Income Tax Form 1040ME is the main form used by most taxpayers.

Action Steps for Residents, Immigrants, and Businesses

• Check your income: Know which tax bracket you fall into for the 2025 tax year.
• Monitor legislative updates: Stay informed about possible changes to Maine’s state income tax rates and brackets, especially if you are a high earner or business owner.
• Plan for the future: If you are considering moving to Maine, starting a business, or making a large investment, factor in possible tax changes.
• File on time: Make sure to file your Maine state income tax return by the deadline, usually April 15.
• Seek help if needed: If you have questions about your tax situation, contact Maine Revenue Services or a qualified tax advisor.

Implications for Pending Applications

If you have a pending immigration or residency application that requires proof of income or tax compliance, use the current Maine state income tax rates and brackets for your calculations. If the proposed changes become law, you may need to update your documents or provide additional information.

Conclusion and Next Steps

Maine’s state income tax rates and brackets for 2025 remain unchanged for now, but important proposals could affect future tax years. Residents, newcomers, and businesses should stay informed about possible changes, especially those related to state income tax rates, tax brackets, and corporate tax rates. By understanding the current system and keeping an eye on legislative updates, you can make better financial decisions and avoid surprises at tax time.

For more information, visit the Maine Revenue Services official website, where you can find the latest updates, forms, and contact details. If you are new to Maine or have special circumstances, consider speaking with a tax professional to make sure you meet all requirements and take advantage of any available deductions or credits.

By staying informed and prepared, you can manage your Maine state income tax obligations with confidence, whether you are a long-time resident, a new immigrant, or a business owner planning for the future.

Learn Today

Graduated Income Tax → A tax system where rates increase as taxable income increases progressively over income brackets.
Tax Brackets → Income ranges taxed at distinct rates that determine how much state tax individuals owe.
Inflation Adjustments → Annual changes to tax brackets to prevent higher taxes due solely to rising living costs.
Corporate Tax Rate → The percentage tax businesses pay on corporate profits, proposed to rise to 10% in Maine.
Taxable Income → Income amount remaining after deductions and exemptions, used to calculate state income tax owed.

This Article in a Nutshell

Maine’s graduated 2025 state income tax rates apply up to 7.15%. Proposed legislative changes may adjust rates, adding higher brackets and raising corporate taxes to 10% from 2026. Residents and businesses should monitor updates and consult tax professionals to plan finances effectively and comply with tax requirements.
— By VisaVerge.com