Maine Minimum Tax Worksheet for Schedule B

Minimum Tax Worksheet for Schedule B
17_1120_schB_ws&instructions.indd
2017
WORKSHEET FOR MAINE FORM 1120ME
SCHEDULE B, MODIFICATIONS
MODIFICATION FOR ALTERNATIVE MINIMUM TAX
ADDITIONS:
1.

Income taxes imposed by Maine or any other state (attach schedule) ................................1. __________________

2.

Interest from state and municipal bonds other than Maine ..................................................2. __________________

3.

Net operating loss adjustment ..............................................................................................3. __________________

4.

Maine capital investment credit bonus depreciation add-back .............................................4. __________________

5.

Bonus depreciation add-back ...............................................................................................5. __________________

6.

Other (see instructions) ........................................................................................................6. __________________

7.

TOTAL ADDITIONS (add lines 1 through 6) .........................................................................7. __________________

SUBTRACTIONS:
8.

Nontaxable interest ..............................................................................................................8. __________________

9.

Foreign dividend gross-up ....................................................................................................9. __________________

10.

Work opportunity credit and empowerment zone credit deductions
(attach federal Form 5884 and/or Form 8844, as appropriate) ..........................................10. __________________

11.

Income not taxable under the Constitution of Maine or the U.S. ........................................ 11. __________________

12.

Dividends from certain affiliated corporations (limitations - see instructions) .....................12. __________________

13.

Alternative minimum tax net operating loss deduction carryover
(limitation - see instructions) ...............................................................................................13. __________________

14.

Income from ownership interest in pass-through entity financial institutions
subject to Maine franchise tax (see instructions) ...............................................................14. __________________

15.

State income tax refunds ....................................................................................................15. __________________

16.

Bonus depreciation/section 179 expense recapture (see instructions) ..............................16. __________________

17.

Other (see instructions) ......................................................................................................17. __________________

18.

TOTAL SUBTRACTIONS (add lines 8 through 17) ............................................................18. __________________

19.

ADJUSTMENT FOR MAINE INCOME MODIFICATIONS (line 7 minus line 18)
Enter here and on Form 1120ME, Schedule B, line 2 (may be a negative number) ..........19. __________________

Rev. 8/17

Instructions for calculating Maine income Modifications
for purposes of 2017 alternative minimum tax
Additions
Line 1. Income taxes imposed by Maine or any other
state. Maine does not permit a deduction for income taxes
imposed by Maine or any other state. Enter income taxes
taken as a deduction on federal Form 1120 that are also
deducted in calculating federal alternative minimum taxable
income (“AMTI”) on Form 4626, line 7. However, to the
extent claimed federally, Maine does not require the addition
of the Ohio Commercial Activity Tax, the Texas Franchise
Tax, and the portions of the Michigan Business Tax that are
not based on income.
Line 2. Interest from state and municipal bonds other
than Maine. Enter the amount from Maine Form 1120ME,
line 4c, less interest from private activity bonds already
included in federal AMTI. This is interest from municipal and
state bonds and private activity bonds, other than Maine, that
are not included in your Federal AMTI. For example, enter
interest from City of New York bonds on this line. However,
do not enter interest from Portland, Maine bonds (see Figure
1 below).
Line 3. Net operating loss adjustment. Enter on this line
the amount of Maine income addition modification that was
previously offset by a federal alternative tax net operating
loss (“NOL”) deduction. For example, if a taxpayer’s
alternative tax net operating loss (“ATNOL”) for 2016 (year
of the loss) was $1,000, all carried over to 2017, and the
taxpayer had $500 of Maine addition modifications in 2016,
$500 of the ATNOL deduction for 2017 must be added
back. Also, enter on this line any amount included in federal
ATNOL deduction relating to amounts carried back to this
tax year. For example, if the taxpayer has an ATNOL of
$1,000 in 2016, the year of the loss, and that amount is
carried back to the 2015 tax year, the $1,000 must be added
back on this line for 2015. The amount of the add-back can
be recovered in future tax years. For more information on
Maine’s treatment of NOLs, go to www.maine.gov/revenue/
forms (select Income Tax Guidance Documents).

Line 6. Other. Include on this line the following items:
• Ownership interest in a pass-through entity financial
institution. Enter any loss or deduction included in
federal AMTI attributable to an ownership interest in a
pass-through entity financial institution.
• Domestic production activities deduction add-back.
Federal taxable income must be increased by the
amount claimed as a domestic production activities
deduction. Enter the amount from federal Form 1120,
line 25.
• Maine fishery infrastructure investment tax credit
add-back. The amount claimed as a deduction in
determining federal alternative minimum taxable
income that is used to calculate the Maine fishery
infrastructure investment tax credit.
• Credit for wellness programs add-back. Enter the
amount claimed as a deduction in determining the
federal alternative minimum taxable income that is
included in the credit for wellness programs.

Subtractions
Line 8. Nontaxable interest. To the extent included in
federal AMTI and net of related expenses, enter interest
on U.S. bonds, U.S. Treasury notes, or other obligations of
the U.S. government which, by law, are exempt from state
taxes, but taxable by the federal government. Also include
interest from bonds issued by the State of Maine or Maine
municipalities if included in federal AMTI. Include on this
line interest from Maine private activity bonds included
in alternative minimum taxable income. Taxpayers may
subtract from federal AMTI interest income and capital
gains from the sale of bonds issued by the Maine Waste
Management Agency to the extent included in federal AMTI
on Form 4626, line 7 (see Figure 1 below).
Interest type/action
Figure 1

Maine

Non-Maine

Private activity bonds

deduct*

no adjustment

State & Municipal bonds

deduct*

add**

*If included in federal AMTI **If not included in federal AMTI
Line 4. Maine capital investment credit bonus depreciation
add-back. The Maine capital investment credit is available
to businesses that place depreciable property in service in
Maine during the taxable year beginning in 2017. Enter on
this line the net increase in depreciation resulting from bonus
depreciation claimed on the federal return relating to property
for which the Maine Capital Investment credit is claimed.
Line 5. Bonus depreciation add-back. Enter on this line the
amount from Form 1120ME, line 4f. For more information on
this modification, see Form 1120ME, line 4f instructions and
the MRS website at www.maine.gov/revenue/forms (select
Income Tax Guidance Documents, and then select Maine
Income Modifications Related to Bonus Depreciation and
Section 179 Expense).

Line 9. Foreign dividend gross-up. Enter the amount from
federal Form 1120, Schedule C, line 15.
Line 10. Work opportunity credit/empowerment zone
credit deductions. Enter on this line an amount equal to
your federal Work Opportunity Credit salaries and wages
deduction and/or federal Empowerment Zone Credit salaries
and wages deduction (from Maine Form 1120ME, line 2c) to
the extent allowed against federal AMT.
Line 11. Income not taxable under the Constitution of
Maine or the U.S. Enter income this state is prohibited from
taxing under the Constitution or laws of the United States or
the Constitution of the State of Maine, to the extent included
in federal AMTI. The amount entered on this line must be

Instructions for calculating Maine income Modifications
for purposes of 2017 alternative minimum tax, cont.
decreased by any expenses incurred in the production of
that income to the extent that these expenses are deductible
in determining federal AMTI. Attach a worksheet detailing
the amount claimed on this line.
Line 12. Dividends from certain affiliated corporations.
Enter 50% of the apportionable dividend income the taxpayer
received during the taxable year from an affiliated corporation
that is not included with the taxpayer in a Maine combined
report. Dividends must be included on Form 4626, line 7. In
order to be affiliated, a corporation must be more than 50%
owned. Although this may include domestic entities, most
affiliated corporations not included in a combined report are
foreign entities.
Line 13. Alternative minimum tax net operating loss
deduction carryover. If you have an Alternative Minimum
Tax (AMT) net operating loss for tax years ending in 2001 or
later that was carried back for federal purposes, but added
back to Maine AMT income under §§ 5200-A(1)(H) or 5200A(1)(M), you are allowed a deduction on this line equal
to the amount of the income addition required for Maine
income tax purposes. The deduction must be within the
allowable NOL carryforward period plus the number of years
the carryforward was denied under §§ 5200-A(2)(H)(5) or
5200-A(2)(L)(5). The deduction cannot reduce Maine AMT
taxable income to less than zero and must not have been
previously used as a modification.
If you have an AMT net operating loss carryforward that was
limited under § 5200-A(1)(U) for the tax year beginning in
2008 or denied under § 5200-A(1)(V) for tax years beginning
in 2009 through 2011, you are allowed a deduction on this line
equal to the amount of the AMT income addition required for
Maine income tax purposes. The deduction must be within
the allowable NOL carryforward period plus the number of
years the carryforward was limited or denied under §§ 5200A(1)(U) or 5200-A(1)(V) and 5200-A(2)(T). The deduction
cannot reduce Maine AMT taxable income to less than zero
and must not have been previously used as a modification.
For more information and examples, go to www.maine.gov/
revenue/incomeestate and select Guidance Documents.
Line 14. Income from ownership interest in pass-through
entity financial institutions subject to Maine franchise
tax. Financial institutions are subject to Maine’s franchise
tax, regardless of organizational structure. If federal AMTI
includes income from ownership of a financial institution
that is a pass-through entity (such as a partnership, S
corporation, or an entity disregarded as separate from
its owner), enter the amount on this line. Attach federal
Schedule K-1 reporting this amount.
Line 15. State income tax refunds. Enter the amount of
state income tax refunds from Form 1120ME, line 2h and

included in federal AMTI provided the amount has already
been taxed by Maine. This modification may not reduce
Maine AMTI to less than zero, and the amount refunded
from this state or another state must not have been
previously used as a modification. Any unused portion of
the modification may be carried forward 20 years.
Line 16. Bonus depreciation/section 179 expense
recapture. The recapture amount claimed in any year is
based on the addition modification for which the recapture
relates. The recapture amount for minimum tax is the same
as the recapture amount as calculated for regular tax on
Form 1120ME, line 2i. For more information, go to the MRS
web site at www.maine.gov/revenue/forms (select Income
tax Guidance Documents and then select Maine Income
Modifications Related to Bonus Depreciation and Section
179 Expense).
Line 17. Other. Include on this line the following items:
• Northern Maine Transmission Corporation adjustment.
Income, including gain from sale of bonds, notes
or other evidences of indebtedness and any other
income or money of the Northern Maine Transmission
Corporation are exempt from state income tax (see 10
M.R.S. § 9205). Enter only if included in federal AMTI.
• Gain on sale of multifamily affordable housing. This
modification equals the total of capital gains and
ordinary income resulting from depreciation recapture
pursuant to Code sections 1245 and 1250 realized
on the sale of multifamily affordable housing property.
Enter amount included in federal AMTI. Qualified
property must be certified by the Maine State Housing
Authority (“MSHA”). A copy of the MSHA certificate
must be attached to the return.
• Discharge of indebtedness. Enter on this line income
recognized at the federal level through the deferral of
income from the discharge of indebtedness claimed as
a Maine income addition modification in 2009 or 2010.
Generally, the recognition of this income is deferred
until 2014 for federal tax purposes. In no event may
the aggregate amount claimed on this line exceed
the total addition modifications claimed for 2009 and
2010 under 36 M.R.S. § 5200-A(1)(W) related to the
deferral under the Code section 108(i).
• Seed Capital Investment Tax Credit. Enter on this line,
to the extent included in federal AMT taxable income,
the refundable portion of the seed capital investment
tax credit under § 5216-B received by, or from, a
private venture capital fund.