This bill enacts a new Maine dependent income tax credit to replace the existing dependent exemption tax credit beginning in 2023. The dependent tax credit is available for a dependent who has resided with the taxpayer claiming the credit for at least 6 months of the tax year and for whom the taxpayer has provided more than 50% of that dependent's financial support during the tax year. The tax credit is fully refundable and may not be counted as income, an asset or a resource for purposes of state or municipal benefits. The tax credit for 2023 is $350 for each dependent but is annually indexed for inflation. The bill requires the State Tax Assessor to make the application for the child tax credit available as part of the sales tax fairness credit or property tax fairness credit application or through another simplified application. The assessor is required to work with the Commissioner of Health and Human Services to make the application for the credit available from the Department of Health and Human Services' state benefits web portal, My Maine Connection. Finally, the bill requires the assessor to include as part of the assessor's tax expenditures report to the joint standing committee of the Legislature having jurisdiction over taxation matters specific information about the tax credit, including the number of taxpayers claiming the credit and the number of children and dependents claimed in order to obtain the tax credit.

Statutes affected:
Bill Text LD 1544, HP 996: 36.199, 36.5403