Maine residents can claim the Dependent Exemption Tax Credit for the tax year 2025 in the coming tax season. Residents who are preparing for the state tax return can learn everything about this credit, including eligibility, amount, and others, here.
The Maine DETC helps families with children or dependents access financial support and enhances the well-being of children living in rural areas or in families with low incomes. In the 2024 tax year, the DETC was refundable for the first time, allowing many families, children, and adults to receive the full credit.
From 2025, the credit will be aligned with inflation, increasing with it, ensuring that people receive the appropriate amount. The government strives to make changes that will help all the people and reduce child poverty in the state.
Who will be eligible for the Maine Dependent Exemption Tax Credit?
If you are living in Maine and planning to claim the Dependent Exemption Tax Credit, you should check the eligibility requirements for the credit below:
- You must have claimed the child as a dependent on your federal tax return and have a valid Social Security number.
- You can claim the credit for the qualifying child for whom you have claimed the federal child tax credit on the federal tax return.
- Your income should not exceed the income threshold for the tax year 2025; otherwise, it will be reduced.
- The part-year resident can also receive the credit if they meet certain conditions.
- You must be a Maine resident who can file the state tax return.
What will be the DETC credit amount in 2026?
The credit amount under the DETC for Maine residents is $300 for each qualifying child who was claimed as a dependent on the federal tax return. The government has proposed an increase in the credit for dependents and a qualifying child under 6 years of age.
The proposal is now finalized, and the Maine DETC amount is doubled for the tax years beginning on or after 01 January 2025, for a child under 6 to $600, whereas for the other dependents over 6, the credit remains at $300.
How will the DETC credit amount be reduced and phased out?
According to the Maine Department of Revenue guidelines and government provisions, the credit phase-out and income threshold have changed for the 2025 tax year. If the income of the Maine taxpayers exceeds the following amount, their credit amount will be reduced by $20 for each $500 earned above the income threshold:
- Single taxpayers: $100,000
- Head of household: $125,000
- Married filing jointly/ Surviving spouse: $150,000
If your income goes above the mentioned income threshold based on your filing status, you can expect the payout to reduce, but not below zero. So, the amount will totally phase out at the following income:
- $400,000 for joint filers
- $200,000 for single filers and others
How to claim the DETC?
If you qualify for the DETC for the qualifying child or dependent, you can claim the credit with your state tax return in the following way:
- You should file the state tax return and claim the credit with Form 1040ME and Schedule A.
- You should enter all the valid information in the forms and complete the DETC worksheet from Line 1 to 9 in Schedule A to determine your credit amount and claim it.
- Remember, you should first file the federal tax return, and it requires the qualifying child to be claimed as a dependent on the federal tax return.
When can you expect the Maine DETC refund?
If you have filed the Maine state tax return and claimed the DETC for the tax year, you can expect the refund to proceed following the standard tax refund timeline. The revenue authority will review the tax return and credit claim; hence, it can take time.
However, based on the standard timeline of the Maine refund process, here’s when you can expect your DETC refund:
- E-filed: Refund can arrive within 4 to 6 weeks.
- Paper tax Return: Refund can be processed in 2 to 3 months.
Maine residents, the government has changed the eligibility for the DETC from the 2026 tax year, where it will depend on the personal exemption standard rather than the child tax credit. So, keep an eye on the credit changes, and if you qualify for the tax year 2025, claim it in the upcoming tax season.
Disclaimer: Maine’s 2026 dependent exemption credit rules may update. Final eligibility and refund amounts are set by state tax authorities.