USA State Payroll Rates + Resources: State of Maine: Filing State Income Taxes, W2s, and 1099s

The purpose of this documentation is to outline the processes and requirements associated with filing state income taxes as well as how to file W-2s and 1099s, if needed, in the state of Maine.

State Income Tax Withholding 

Generally, the amount of withholding is determined based on the information provided on the Maine Employee’s Withholding Allowance Certificate (Form W-4ME). 

Your employee needs to return their completed and signed copy of Maine Employee’s Withholding Allowance Certificate (Form W-4ME) on the same date that you provide them with their required federal Withholding Allowance Certificate (Form W-4).  

The employee must claim the same marital status on their Form W-4ME as is listed on their federal Form W-4. However, any married employees can elect to have their wages withheld at the higher single rate by selecting the “married but withhold at single rate” option on their Form W-4ME. 

The employee's Form W-4ME must also list the number of withholding allowances the payee claims for Maine withholding, which may not exceed the number to which the employee is entitled to under law or rule. The number of withholding allowances claimed on the federal Form W-4 is the base for the number claimed on the Form W-4ME. However, the number of allowances claimed must be adjusted for Maine withholding in accordance with the instructions on Form W-4ME to reflect differences between federal and Maine income tax laws.
The number of withholding allowances claimed on Form W-4ME may not exceed the number of allowances used to calculate the employee’s federal income withholding unless that employee has provided an approved Maine withholding exemption variance certificate to the employer.

If the employee is required to provide you with a revised federal Form W-4 because of a change in status or decrease in the number of withholding allowances, the employee must also complete a new Form W-4ME on the same date to reflect the same change. The revised Form W-4ME takes effect on the same date as the revised federal Form W-4.

An employer/payer is required to submit a copy of Form W-4ME, along with a copy of any supporting information provided by the employee/payee, to Maine Revenue Services, PO Box 9107 Augusta, ME 04332-9107 if:

• The employer/payer is required to submit a copy of federal Form W-4 to the Internal Revenue Service either by written notice or by published guidance as required by federal regulation 26 CFR 31.3402(f)(2)-1(g); or

• An employee performing personal services in Maine furnishes a Form W-4ME to the employer containing a non-Maine address and, for any reason, claims no Maine income tax is to be withheld. This submission is not required if the employer reasonably expects that the employee will earn an annual Maine-source of income of less than $5,000 or if the employee is a nonresident working in Maine for no more than 12 days for the calendar year and is, therefore, exempt from Maine income tax withholding.

Submit copies of Form W-4ME directly to the MRS Withholding Unit separately from any other tax filing.

Employers/Payers must complete lines 7 through 10 only if required to submit a copy of Form W-4ME to Maine Revenue Services. 

If any of the circumstances below occur, the employer or payer must withhold as if the employee or payee were single and claiming no allowances. Maine income tax must be withheld at this rate until such time that the employee or payee provides a valid Form W4-ME.

• The employee/payee has not provided a valid, signed Form W-4ME;

• The employee’s/payee’s Form W-4 or W-4P is determined to be invalid for purposes of federal withholding;

• The Assessor notifies the employer/payer that the employee’s/payee’s Form W-4ME is invalid; or

• The employee’s/payee’s Personal Withholding Allowance Variance Certificate has expired, a new variance certificate has not been approved and submitted to the employer/payer and the payee has not provided the payer with a valid FormW-4ME. 

An employee/payee who is exempt from federal income tax withholding is also exempt from Maine income tax withholding. The exemption on line 6c expires at the end of each year. If the employee fails to submit a new Form W-4ME for the next calendar year, the employer must begin withholding at the single rate with no allowances.   

State Income Tax Withholding Reporting and Deposits 

Reporting

All employers and non-wage payers registered for a Maine income tax withholding account must electronically file Maine quarterly withholding tax returns following the below schedule:

941ME returns can be filed electronically at the Maine Revenue Services (MRS) I-File web-site.

Remittance Frequency

Any person with a combined tax liability during the lookback period of $10,000 or more is required to remit all Maine tax payments electronically, using either the ACH credit method or ACH debit method, for any payment for which an electronic processing method is provided by the Assessor.

MRS will periodically review the payment histories of taxpayers, employing the lookback period in order to determine which taxpayers are required or will become required to make payments via EFT. When MRS determines that a taxpayer is or will become liable for making payments electronically, the taxpayer will be notified and provided with the necessary registration forms or, in the case of internet filing, the internet address, to establish an EFT account with MRS.  

You can either register at the EZ Pay Internet Payment System or you can find the EFT application and other EFT information on the EFT Informational page.  

W-2 and 1099 Forms 

All employers and non-wage payers who withhold Maine income tax from payments to employees or other recipients must file a year-end reconciliation, Form W-3ME (due by February 28th).

Unless you have a waiver, you must file Form W-3ME electronically (see MRS Electronic Services). If you have a waiver from the electronic filing requirement, you may download the form on the MRS Forms page.

Filing 250 or More Forms W-2 or 1099:

Employers and payers issuing 250 or more Forms W-2 or 1099 must file such forms with MRS electronically using the Maine Employers Electronic Tax Reporting System (MEETRS). For more information about electronic filing of Forms W-2 and 1099, (see MEETRS File Upload Specifications & Instructions).

Filing Less than 250 Forms W-2 or 1099: 

Employers and payers issuing fewer than 250 Forms 1099 may submit data either directly to MRS or to MRS through the IRS under the Combined Federal/State Filing Program but are not required to submit.

For further details, see the Maine Revenue services Withholding Tables for Individual Income Taxes documentation.