Maine Maine Capital Investment Credit

Maine Capital Investment Credit
2023 Maine Capital Investment Credit Worksheet
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Maine Capital Investment Credit
Worksheet for Tax Year 2023
36 M.R.S. § 5219-NN

Enclose this worksheet and federal Form 4562 with Form 1040ME, Form 1041ME, or Form 1120ME.

Taxpayer Name:________________________________________ EIN/SSN: __________________

Note:	 In the case of pass-through entities (such as partnerships, LLCs, S corporations, and trusts) making eligible investments,
the partners, members, shareholders, beneficiaries, or other owners are allowed a credit in proportion to their respective
interests in these entities. Enter name and ID number of the entity on the lines below. Also enter your ownership percentage
in the pass-through entity for the tax year. Attach a copy of the federal Schedule K-1 issued to you by the pass-through
entity.

			Ownership
	
Name of Pass-through Entity	
EIN	
Percentage
________________________________________________ 	

________________________ 	

________ %

1.	 Enter on this line the amount of Maine Capital Investment Credit bonus depreciation
	
add-back from Form 1040ME, Schedule 1A, line 5; Form 1041ME, Schedule 1, line 1f;
	
or Form 1120ME, Schedule 1A, line 7................................................................................ 1.____________________
2.	 Current year credit. Multiply line 1 by 1.2% (.012) ............................................................. 2.____________________
	
3.	 Enter the amount of unused credit from previous years..................................................... 3.____________________
4.	 Total available credit (line 2 plus line 3). Enter this amount on Form 1040ME,
	
Schedule A, line 14; Form 1041ME, Schedule A, line 9; or
	
Form 1120ME, Schedule C, line 1e.................................................................................... 4.____________________

Note: MRS may request additional information supporting the credit claimed before the return can be processed.
This credit is repealed for tax years beginning on or after January 1, 2025, except that any unused credit amounts may be
carried forward for up to 20 taxable years.

Recapture provisions apply. See instructions.

Revised: December 2023

2023 Maine Capital Investment Credit
General Instructions
This credit is available to businesses that invest in certain depreciable property placed in service in Maine during a tax year
beginning on or after January 1, 2023 and that claim special depreciation under IRC § 168(k), commonly known as bonus
depreciation, on that property. Income tax filers (including owners of pass-through entities) are eligible to claim this credit
in addition to the associated income addition modification and the related depreciation recapture subtraction modification
in future years over the life of the asset. See instructions for Form 1040ME, Schedule 1A, lines 4, 5, and Schedule 1S, line
10; Form 1041ME, Schedule 1, lines 1e, 1f, and 2c; or Form 1120ME, Schedule 1A, lines 7 and 8 and Schedule 1S, line 9.
The credit is equal to a percentage of the net increase in the depreciation attributable to the depreciation deduction claimed
by the taxpayer under IRC § 168(k) for property placed in service in Maine during the taxable year and reported as an
addition to income. For tax year 2023, the credit is equal to 1.2% of the net increase in the depreciation claimed. The credit
is limited to the tax liability of the taxpayer, but any unused portion may be carried forward for up to 20 years. The credit is
subject to full recapture. This credit may not be claimed by the following businesses:
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Public utilities (defined under 35-A M.R.S. § 102);
Persons providing radio paging services (defined under 35-A M.R.S. § 102);
Persons providing mobile telecommunications services (defined under 35-A M.R.S. § 102);
Cable television companies (defined under 30-A M.R.S. § 2001);
Persons providing satellite-based direct television broadcast services; and
Persons providing multichannel, multipoint television distribution services.

Also, the credit may not be claimed with respect to property transferred out-of-state or otherwise removed from use in Maine
within the 12-month period following the date it is placed in service in Maine. In addition, the credit may not be claimed by
a nonresident owner of a pass-through entity who is participating in a composite return. For more information on composite
filing, see Maine Revenue Services Rule 805 at www.maine.gov/revenue/publications/rules.
This credit is repealed for tax years beginning on or after January 1, 2025. Except that any unused credit amounts may be
carried forward up to 20 taxable years.
Special instructions for pass-through entities
Line 1. In the case of pass-through entities (such as partnerships, LLCs, S corporations, and trusts), the partners, members,
shareholders, beneficiaries, or other owners are allowed a credit on their ownership share of the bonus depreciation
generated by the pass-through entity that is eligible for the credit.
Special instructions for corporations engaged in a unitary business
A tax credit generated by a taxable corporation that is a member of an affiliated group engaged in a unitary business may
be applied only against the Maine income tax liability of that member, and not against the Maine income tax liability of other
members of the unitary business, unless otherwise specifically permitted by law. For additional information, see MRS Rule
810 at www.maine.gov/revenue/publications/rules.

Recapture Instructions
The amount of credit claimed on your Maine income tax return is subject to recapture if the related property was transferred
out-of-state or otherwise removed from service in a subsequent tax year, but within 12 months of being placed in service
in Maine. To recapture the credit, you must file an amended return for the tax year you claimed the credit. For example, if
you claimed the credit on your 2020 Maine income tax return and the entire credit is subject to recapture, you must amend
your 2020 Maine income tax return to recapture the credit. If necessary, you must also amend the income tax returns for
subsequent tax years to remove any recaptured credit carryforward amount and make other adjustments related to bonus
depreciation.
To recapture a credit and make other adjustments related to bonus depreciation, follow the instructions below. For more
information on the Maine treatment of bonus depreciation, see the Maine guidance document titled “Modifications Related to
Bonus Depreciation & Section 179 Expensing” at www.maine.gov/revenue/taxes/income-estate-tax/guidance-documents.

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2023 Maine Capital Investment Credit
Recapture Instructions - Continued
Note: Unless otherwise stated, line references in the following instructions are to the 2023 forms; line references to prior
year forms may differ.
If you filed an individual income tax return – tax years beginning in 2011 through 2023. If you claimed the Maine
capital investment credit on a Maine income tax return for 2011 through 2023 and the credit is subject to recapture, follow
these instructions:
●	

Step 1. File an amended return for the tax year you claimed the credit. Make the following adjustments on the
amended return:
o	 remove from Form 1040ME, Schedule 1A, line 5 the bonus depreciation addition modification amount
associated with the property subject to the credit recapture;
o	 recalculate the addition modification amount for Form 1040ME, Schedule 1A, line 4 to include in the
calculation depreciation amounts associated with the property subject to the credit recapture;
o	 recalculate the Maine capital investment credit for the taxable year, excluding from the calculation the
bonus depreciation amount associated with the property subject to the credit recapture. If all property
forming the basis of the original credit is subject to the credit recapture, the amended credit for the taxable
year is zero. Enter the recalculated credit on Form 1040ME, Schedule A, line 14. The reduction in the credit
amount represents the amount of the credit recaptured.

●	

Step 2. If necessary, file amended returns for tax years subsequent to the year you are amending under Step
1 in order to:
o	 relative to property placed in service during tax years 2011 through 2019, increase the subtraction
modification amount on Form 1040ME, Schedule 1S, line 10 to reflect the increased modification on the
amended return - Form 1040ME, Schedule 1A, line 4 - filed under step 1;
o	 reduce Form 1040ME, Schedule A, line 14 to remove any Maine capital investment credit amount carried
forward to the tax year associated with the credit recaptured on the amended return filed under Step 1.

If you filed a fiduciary income tax return – tax years beginning in 2011 through 2023. If you claimed the Maine capital
investment credit on a return for 2011 through 2023 and the credit is subject to recapture, follow these instructions:
●	

Step 1. File an amended return for the tax year you claimed the credit. Make the following adjustments on the
amended return:
o	 remove from Form 1041ME, Schedule 1, line 1f the bonus depreciation addition modification amount
associated with the property subject to the credit recapture;
o	 recalculate the addition modification amount for Form 1041ME, Schedule 1, line 1e to include in the
calculation depreciation amounts associated with the property subject to the credit recapture;
o	 recalculate the Maine capital investment credit for the taxable year, excluding from the calculation the
bonus depreciation amount associated with the property subject to the credit recapture. If all property
forming the basis of the original credit is subject to the credit recapture, the amended credit for the taxable
year is zero. Enter the recalculated amount on Form 1041ME, Schedule A, line 9. The reduction in the credit
amount represents the amount of the credit recaptured.

●	

Step 2. If necessary, file amended returns for tax years subsequent to the year you are amending under Step
1 in order to:
o	 relative to property placed in service during tax years 2011 through 2019, increase the subtraction
modification amount on Form 1041ME, Schedule 1, line 2c to reflect the increased modification on the
amended return - Form 1041ME, Schedule 1, line 1e - filed under step 1;
o	 reduce Form 1041ME, Schedule A, line 9 to remove any Maine capital investment credit amount carried
forward to the tax year associated with the credit recaptured on the amended return filed under Step 1.
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2023 Maine Capital Investment Credit
Recapture Instructions - Continued
If you filed a corporate income tax return – tax years beginning in 2011 through 2023. If you claimed the Maine capital
investment credit on a return for 2011 through 2023 and the credit is subject to recapture, follow these instructions:
●	

Step 1. File an amended return, Form 1120ME, for the tax year you claimed the credit. Make the following
adjustments on the amended return:
o	 remove, for purposes of Form 1120ME, Schedule 1A, line 7, the bonus depreciation addition modification
amount associated with the property subject to the credit recapture;
o	 recalculate the addition modification amount, for purposes of Form 1120ME, Schedule 1A, line 8, to include
in the calculation depreciation amounts associated with the property subject to the credit recapture;
o	

●	

recalculate the Maine capital investment credit for the taxable year, excluding from the calculation the bonus
depreciation amount associated with the property subject to the credit recapture. If all property forming the
basis of the original credit is subject to the credit recapture, the amended credit for the taxable year is zero.
Enter the recalculated credit on Form 1120ME, Schedule C, line 1e (Form 1120X-ME, Schedule C, line 29f
for tax years 2011 through 2015). The reduction in the credit amount represents the amount of the credit
recaptured.

Step 2. If necessary, file amended returns for tax years subsequent to the year you are amending under Step
1 in order to:
o	 relative to property placed in service during tax years 2011 through 2019, increase the subtraction
modification amount on Form 1120ME, Schedule 1S, line 9 to reflect the increased modification on the
amended return - Form 1120ME, Schedule 1A, line 8 - filed under step 1;
o	 reduce Form 1120ME, Schedule C, line 1e to remove any Maine capital investment credit amount carried
forward to the tax year associated with the credit recaptured on the amended return filed under Step 1.

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