Beginning in 2003, Maine partially decoupled from the federal estate tax laws. What this means in 2009 is that the following rules apply:
- Only estates worth more than $1,000,000 will be taxable in Maine. In some cases, however, even estates worth more than $1,000,000 won't be taxable, as long as the assets are transferred to a surviving spouse or other deductions (such as charitable contributions) reduce the taxable estate to less than $1,000,000.
- Form 706ME must be filed if an estate is valued at more than $1,000,000. The return and tax payment, if any, are due within nine months of the decedent's date of death. An automatic extension of up to six months to file the return may be granted, however, this doesn't extend the time to pay any tax due.
- The tax rate is a progressive rate that maxes out at 16% for the amount above $10,040,000.
- Even if an estate is valued at less than $1,000,000, a simple form, Form 706ME-EZ, must be filed in order to remove the “automatic” lien that's imposed on all estate real and tangible property located in Maine.
This information is complements of Maine Revenue Services.
The bottom line - if you're a Maine resident and your estate is passing to someone other than your spouse and the value is $1,000,000 or more, or if you're a nonresident who owns real estate and/or tangible personal property located in Maine and your estate is valued at $1,000,000 or more, then your estate may owe a Maine estate tax. Aside from this, even if an estate is valued under $1,000,000, Form 706ME-EZ must be filed in order to remove the automatic tax lien that's imposed on estate real and tangible property located in Maine. Up next, Maryland inheritance taxes.