Maine Real Estate Withholding Return for Transfer of Real Property - for Sellers who are Individuals, Sole Proprietors, LLCs, or S Corporations

Real Estate Withholding Return for Transfer of Real Property - for Sellers who are Individuals, Sole Proprietors, LLCs, or S Corporations
Form REW-1-1040
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Real Estate Withholding Payment Voucher
for Transfer of Maine Real Property
by Sellers who are Individuals or Sole Proprietors

Form REW-1-1040

2023

99
*2301401*

To be completed by the buyer or other transferee required to withhold
IMPORTANT - Multiple Sellers: A separate Form REW-1 must be completed for each seller receiving proceeds (see instructions).

Use Form REW-1-1040 only for sellers who are individuals or sole proprietors, including individual members of a pass-through
entity (LLC, S corporation, partnership, grantor/revocable trusts, etc.).
1.	 Name of seller (and seller’s spouse, if married filing jointly on Form 1040ME) - see instructions.
a)

	

b)

	

Check here if
installment sale

Seller’s last name	

Seller’s first name	

M.I.	

Seller’s Social Security Number

Spouse’s last name (if filing jointly)	

Spouse’s first name 	

M.I.	

Spouse’s Social Security Number

For pass-through entity seller only. See instructions before completing these lines. 		

	

c)
	
Entity name	
Entity EIN		
Entity type (LLC, S corporation, trust, etc.) 		
Note: A Form REW-1-1040, REW-1-1041, or REW-1-1120, whichever applies, must be completed for each member/owner of the entity shown on line 1c.
2. 	 Address of seller
	

Current mailing address	

City	

State	

3.	

Physical location and use of property

4.	

Street address (if none, provide the map, block, and lot numbers)	 Municipality/Township	
Date Property Acquired	
5. 	 Date of transfer
6. 	 Total consideration (sales price)

$
8.	 Rate of withholding - attach certificate if less than 2.5%

.00

ZIP code

Use of property
7.	 Seller’s
	 percentage of
	 ownership

%

9.	 Amount withheld for this seller

a.	 2.5% of sales price

$

b.	 Less than 2.5%
(Enter certificate number:

	

	

)

	

10.	Name of buyer (withholding agent or other transferee)

12.	Social security number/federal ID number of withholding agent

.00

DO NOT SEND CASH - Make check payable to: Treasurer, State of Maine.
Write seller’s social security number on the check.

11.	Address of buyer/withholding agent
	

Current mailing address

	

City	

State	

ZIP code

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of
my knowledge and belief, they are true, correct and complete.
	 Signature of buyer	

Date	

Signature of buyer’s spouse (if property held jointly)	

Date

	 Signature of seller	

Date	

Signature of seller’s spouse (if married filing jointly)	

Date

	 Seller’s daytime phone number	

Buyer(s) and seller(s) must retain a copy of this form. See instructions.

NOTE: Payments received by Maine Revenue Services will not be refunded prior to filing of the taxpayer’s Maine income tax return.
Mail this form and check to:	 Maine Revenue Services, Income/Estate Tax Division - REW, P.O. Box 9101, Augusta, ME 04332-9101.
Overnight delivery address:	 Maine Revenue Services, Income/Estate Tax Division - REW, 51 Commerce Drive, Augusta, ME 04330.
	

Telephone: (207) 626-8473

[email protected]

Revised: December 2022

General Instructions
Purpose of Form: An estimated Maine income tax
payment is required to be withheld and paid at the time that
real property located in Maine is purchased or otherwise
acquired from a nonresident of Maine. The buyer of the
property must withhold and remit to the state tax assessor
2.5% of the consideration received by the transferor (seller)
on the transfer. To report and pay the estimated income tax
withheld, a completed Form REW-1-1040 (for sellers who
are individuals or sole proprietors), Form REW-1-1041 (for
sellers that are estates or trusts), and/or Form REW-1-1120
(for sellers that are corporations) must accompany the
remittance. 36 M.R.S. § 5250-A.

c.	 The consideration for the property is less than $100,000;
d.	 Written notification of the withholding requirements has
not been provided to the buyer. The real estate escrow
person is liable for the withholding tax unless it is shown
that the failure to notify is due to reasonable cause;
e.	 The seller is the State or an agency or a political
subdivision of the State, the federal government or
an agency of the federal government, an organization
exempt from income taxes pursuant to the Internal
Revenue Code, § 501(a), an insurance company exempt
from Maine income taxes or a subsidiary of an insurance
company described in 24-A M.R.S., § 1157 (5)(B)(1) that
is exempt from Maine income taxes; or,

Also see Seller’s Maine Income Tax Filing Requirement
below.

f.	 The property is being transferred via a foreclosure sale.
Foreclosure sale means a sale of real property incident
to a foreclosure and includes a mortgagee’s sale of real
estate owned property of which the mortgagee, or thirdparty entity, retained or took ownership as the result of
an unsuccessful attempt to sell the property at the time
of a previous foreclosure auction.

Who Must File: A buyer (individual, firm, partnership,
association, society, club, corporation, estate, trust, business
trust, receiver, assignee or any other group or combination
acting as a unit) of a Maine real property interest who is
required to withhold must file the applicable REW-1 forms.
If two or more persons are joint transferees, each must
withhold the required amount. However, the obligation of
each will be met if one of the joint transferees withholds and
remits to Maine Revenue Services the total amount required.

Withholding Certificate Issued by the State Tax
Assessor: A withholding certificate may be issued by the
State Tax Assessor to reduce or eliminate withholding on
transfers of Maine real property interests by nonresidents.
The certificate may be issued if:

Be sure to complete the appropriate REW-1 form for each
seller:
•	 REW-1-1040 - For sellers who will report this sale on
the Maine individual income tax return, Form 1040ME.
(Individuals, sole proprietors, grantor or revocable
trusts, individual members of pass-through entities);

1.	 No tax is due on the gain from the transfer; or,
2.	 Reduced withholding is appropriate because the 2.5%
amount exceeds the seller’s maximum tax liability.
If applicable, complete Form REW-5 to apply for the
certificate no later than five business days prior to closing.

•	 REW-1-1041- For sellers who will report this sale on
the Maine fiduciary income tax return, Form 1041ME.
(estates, trusts); or

When to File: A buyer must report and remit the tax withheld
to Maine Revenue Services with this form within 30 days of
the date of transfer of the property.

•	 REW-1-1120 - For sellers who will report this sale on
the Maine corporate income tax return, Form 1120ME.
(C corporations, other entities taxable at the corporate
level).

Where to File: Send Form REW-1-1040 with payment
directly to: Maine Revenue Services, Income/Estate Tax
Division - REW, P.O. Box 9101, Augusta, ME 04332-9101
(do not send payment or Form REW-1-1040 with the real
estate transfer tax declaration). The Form REW-1-1040 filed
with MRS must be complete; do not redact or remove any
taxpayer identification numbers (SSNs or EINs).

Important note (multiple sellers): If there are multiple
sellers, you must complete a separate REW-1 form for each
seller receiving proceeds from the sale. For example, if the
seller is a partnership, complete a separate REW-1 form for
each partner receiving proceeds from the disposition.

Provide one copy of Form REW-1-1040 to the real estate
escrow person, one copy to the buyer, and two copies to
the seller. Copies retained by the real estate escrow person,
buyer(s), and seller(s) should have the taxpayer identification
numbers redacted or removed.

Exceptions: The buyer is not required to withhold or file this
return if any of the following applies:
a.	 The seller furnishes to the buyer written certification
stating, under penalty of perjury, that as of the date of
transfer the seller is a resident of Maine, as defined in 36
M.R.S. § 5250-A;
b.	 The seller or the buyer has received from the state tax
assessor a certificate of waiver stating that no tax is
due on the gain from the transfer or that the seller has
provided adequate security to cover the liability;

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Seller’s Maine Income Tax Filing Requirement. Generally, a seller who is a nonresident individual must file a Maine
income tax return for the tax year during which the sale of the Maine property occurred to calculate any Maine income
tax due or overpaid. A return is not required if the capital gain from the sale, combined with other Maine-source taxable
income, does not result in a Maine income tax liability. However, a Maine income tax return must be filed to get a refund
of any estimated real estate withholding amount in excess of the Maine income tax liability. The seller must attach a
copy of the REW-1 form to the Maine income tax return to ensure proper credit for real estate withholding paid. Any
claim for refund of an overpayment of withholding must be filed within three years from the due date of the return or three
years from the time the tax was paid, whichever expires later. For more information on the Maine filing requirements,
see Maine Rule 806 and the instructions for Form 1040ME and Schedule NR or NRH at www.maine.gov/revenue.

Specific Instructions
Important note: Except for married individuals who file jointly on Form 1040ME, you must complete a separate Form REW1 for each seller receiving proceeds from the sale.
Line 1.	

Enter the name and social security number of the
seller. Only enter the name and social security
number (SSN) of the seller’s spouse if the seller is
married and will be filing jointly on Form 1040ME.

	

For pass-through entity seller only. If the seller
of the property is a pass-through entity (LLC, S
corporation, partnership, grantor or revocable
trust, etc.), a separate Form REW-1-1040, REW1-1041, or REW-1-1120, whichever applies, must
be filed for each individual, fiduciary, or corporate
member/owner. In no case may a pass-through
entity claim real estate withholding as a payment
of Maine pass-through entity withholding or other
entity-level tax.

	

On each Form REW-1-1040, lines 1a and 1b,
enter the applicable name(s) and SSN(s) of the
individual seller(s) in the spaces provided. Also
enter on line 1c the pass-through entity’s name,
federal employer identification number (EIN), and
pass-through entity type.

Line 2.	

Enter the current mailing address of the seller. Do
not list the address of the transferred property.

Line 3.	

Enter the physical address and municipality/
township of the property. If there is no street
address, enter the map, block, lot, and sub-lot
numbers. Also enter what the property was used
for before the transfer. For example, principal
residence, vacation home, rental property,
commercial, or vacant land.

Line 7.	

Enter the percentage of total proceeds received
by the seller(s) shown on lines 1a and 1b. See
specific instructions below.

	

One seller. If the seller on line 1a is the only
person receving proceeds in the transaction, enter
100%.

	

Married individuals that file jointly. Enter the
percentage of total proceeds recieved by the
individuals shown on lines 1a and 1b. If the sellers
on lines 1a and 1b are the only persons receiving
proceeds in the transaction, enter 100%.

	

For pass-through entity seller only. Enter the
distributive share percentage of the member(s)
shown on lines 1a and 1b.

Line 8.	

Check the appropriate space to indicate the rate of
withholding. If the parties obtained a withholding
certificate from the State Tax Assessor authorizing
a reduced rate of withholding, enter the certificate
number and attach a copy of the certificate to this
return.

Line 9. 	 Enter the dollar amount withheld for the seller(s)
shown on lines 1a and 1b.	
	
	

If line 8, box a is checked:
Multiply the total consideration (line 6) by the
seller’s percentage of ownership (line 7), then
multiply the result by 2.5% (0.025).	

	
	

If line 8, box b is checked:
Enter the reduced amount of withholding shown
on the withholding certificate issued by the State
Tax Assessor to the seller.

Line 4.	

Enter the date the property was acquired by the
seller.

Line 5.	

Enter the date of this transfer.

Line 10. 	 Enter the name of the withholding agent (buyer).

Line 6.	

Enter the total consideration (sales price).
Consideration means the total price paid, or
required to be paid, for real property valued in
money, whether recieved in money or otherwise,
and includes the amount of any mortgage, lien or
encumbrance on the real property. 36 M.R.S. §
5250-A.

Line 11. 	 Enter the address of the withholding agent (buyer).
Line 12. 	 Enter the social security number or federal ID
number of the withholding agent (buyer).

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