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What You Need to Know About the Maine Estate Tax

The estate tax rates in Maine range from 8% to 12%. The tax applies on estates worth more than $5.6 million. This guide has the information you need to know if you’re starting to think about estate planning in Maine. If you’re planning your estate or dealing with financial planning issues in general, it can help to speak with a financial advisor. SmartAsset’s financial advisor matching tool can pair you with an advisor in your area for free.

Maine Estate Tax Exemption

The estate tax threshold for Maine is $5.6 million. If your estate is worth less than that, Maine won’t charge estate tax on it. If it is worth more than that, you’ll owe a percentage of the estate to the government based on a series of progressive rates.

Maine Estate Tax Rate

What You Need to Know About the Maine Estate Tax

The estate tax rate for Maine is graduated. The table below shows all the tax rates and when they apply.

Find your taxable estate bracket in the chart below. The second column shows what is owed on money below the bracket. Then figure out how much higher your taxable wealth is than the bottom of your bracket. Multiply that number by the marginal rate, add the answer to the base rate and you’ll know the estate tax burden.

Here’s an example. Let’s say your total estate is worth $10 million. Subtracting the exemption of $5.60 million, leaves a taxable estate of $4.40 million. Next, find where that number falls on the chart. The base taxes paid for that bracket is $240,000. The bottom of the threshold is $3 million, so we subtract that from $4.40 million and get $1.40 million. That amount multiplied by the marginal rate of 10% is $140,000. When we add that number to the base tax, we get a total Maine estate tax of $380,000 on a $10 million estate.

MAINE ESTATE TAX RATES
Taxable Estate* Base Taxes Paid Marginal Rate Rate Threshold**
$0 – $3 million $0 8% $0
$3 million -$6 million $240,000 10% $3 million
$6 million and up $540,000 12% $6 million

*The taxable estate is the total above the exemption of $5.6 million.
**The rate threshold is the point at which the marginal estate tax rate goes into effect.

What Is the Estate Tax?

The estate tax is a levied on an estate after a person has died but before the money has been passed on to their heirs. It is sometimes colloquially referred to as the “death tax.”

The inheritance tax is a different tax. It is levied on a person’s heirs after they have already received their inheritance.

Maine Inheritance Tax

There is no inheritance tax in Maine. If you get an inheritance from someone out of state, though, the local laws of that state may apply to you. In Pennsylvania, for example, the inheritance tax applies to anyone receiving an inheritance from a person who dies in the state, even if they live out of state.

Maine Gift Tax

There is no gift tax in Maine, but the federal gift tax applies on gifts of more than $14,000 for 2017 and $15,000 for 2018.

Maine Estate Tax for Married Couples

The exemption is not portable between spouses. This means that only $5.60 million can be protected after both spouses die.

Federal Estate Tax

There is also a federal estate tax you may be subject to, with an exemption of $11.18 million in 2018. The federal exemption is portable between spouses, meaning that with some legal steps, up to $22.36 million can be protected by a married couple.

If an estate exceeds that amount, the tax rates range from 18% to 40%. A full chart of federal estate tax rates is below. You can use the same method described in the Maine Estate Tax Rate section to figure out your federal estate tax burden.

FEDERAL ESTATE TAX RATES
Taxable Estate* Base Taxes Paid Marginal Rate Rate Threshold**
$1 – $10,000 $0 18% $1
$10,000 – $20,000 $1,800 20% $10,000
$20,000 – $40,000 $3,800 22% $20,000
$40,000 – $60,000 $8,200 24% $40,000
$60,000 – $80,000 $13,000 26% $60,000
$80,000 – $100,000 $18,200 28% $80,000
$100,000 – $150,000 $23,800 30% $100,000
$150,000 – $250,000 $38,800 32% $150,000
$250,000 – $500,000 $70,800 34% $250,000
$500,000 – $750,000 $155,800 37% $500,000
$750,000 – $1 million $248,300 39% $750,000
Over $1 million $345,800 40% $1 million

*The taxable estate is the total above the exemption of $11.18 million.
**The rate threshold is the point at which the marginal estate tax rate kicks in.

Overall Maine Tax Picture

What You Need to Know About the Maine Estate Tax

The income tax rates in Maine range from 5.8% to 7.15%. You can use our Maine paycheck calculator to figure out how much your take home pay in the Pine Tree State will be. Social Security is not taxed, but pensions and retirement plans are both partially taxed. Capital gains are taxed as regular income.

The general sales tax is 5.5% and there are no local sales taxes, meaning 5.5% is the highest sales tax rate you’ll encounter. The average effective property tax rate in Maine is 1.23%, just about the national average.

Resources for Financial Planning

  • Estate planning, or any type of financial planning, is hard work. It can make sense to get professional help in the form of a financial advisor. You’ll want to make sure, though, that you’re hiring a financial advisor who is a good fit for you and your family. SmartAsset can help with that. SmartAdvisor is our financial advisor matching service. You’ll start by answering a series of questions on your finances and preferences, and our platform will match you with up to three advisors in your area. They’ll get in touch with you to set up a time to talk about your finances and needs so you can see if they’re the right fit for you. All of the advisors on our platform have clean records and are registered advisors.
  • Social Security is just one part of a succesful retirement plan, but it is still important to know just how big your government check will be when you retire. This Social Security calculator can help you figure that out.

Photo credit: ©iStock.com/Drazen_, SmartAsset, ©iStock.com/DenisTangneyJr

Ben Geier, CEPF® Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
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