Maine lawmakers made 25 changes to state tax laws this year, including a $300 bonus for people who worked through the pandemic. Credit: Patrick Sison / AP

A bonus of up to $300 for people who worked during the COVID-19 pandemic is among the 25 tax changes Maine lawmakers made this year that hold benefits for individuals, businesses and towns.

Some of the potential benefits are small, but they can add up. Here’s a guide to some of the biggest changes affecting taxpayers, with a major deadline coming up quickly.

Disaster relief payments

The state will send checks of up to $300 by Dec. 31 to help Mainers offset costs incurred during the COVID-19 pandemic. The one-time payments will go to an estimated 520,000 Mainers, according to Maine Revenue Services.

To qualify, workers must file a Maine individual income tax return for the 2020 tax year as a full-year resident. The deadline to file is Oct. 31.

There are some income limits. The federal adjusted gross income must be less than $150,000 for those who are married and filing a joint return or a qualifying widow or widower. The cap is $112,500 if filing as a head of household and $75,000 for those who are single or married and filing separately. The amounts include received wages, salaries, tips or other taxable employee pay during the 2020 tax year.

Anyone who has been claimed as a dependent on another taxpayer’s 2020 income tax return will not qualify for the payment.

The payments are part of the state budget that Gov. Janet Mills signed into law on July 1. The final amount received will be computed by dividing the $149.8 million in funding for the payments by the number of eligible recipients after the Oct. 31 deadline.

Paper checks will be sent out automatically. Most won’t be subject to Maine income tax, although they may be taxable by the federal government in 2021 tax returns. If there is a federal tax, Maine will allow that amount to be subtracted on the 2021 Maine individual tax return.

The money is a small bonus that isn’t expected to make a large difference to most workers.

“Even in a state that’s relatively poor, that’s not a lot of money,” Laura Emack, a certified public accountant in Prospect, said.

The payment may surprise some Mainers, Mike Santo, a CPA and senior manager at Wipfli LLP in Augusta, said. He said the expected slowdown in the mail could mean some checks will arrive in January, making it confusing for the average taxpayer to know what year to declare receiving the funds if they do owe federal taxes on them.

Unemployment benefits

Up to $10,200 in unemployment compensation is exempt from Maine income tax starting in 2020 for those with federal adjusted gross income of less than $150,000. The amount applies separately to each spouse for those who are married but filing jointly. A significant number of people still haven’t claimed the deduction, Daniel D’Alessandro, staff attorney at Maine Revenue Services, said. Those who already filed 2020 taxes should send in an amended return to claim the benefit.

Business losses

The pandemic erased profits for many Maine businesses. The state allowed them to write off 100 percent of their net operating loss in the 2020 tax year, but starting next year businesses will only be able to write off 80 percent of their loss, the same as federal rules.

Business meal deduction

The state will continue to allow a 50 percent writeoff of meal expenses for business purposes, although the federal government will allow a full writeoff of meal expenses in 2021 and 2022.

Santo said Maine’s lower percentage is disappointing, because restaurants have been one of the hardest hit industries during the pandemic and the higher deduction might spur business for them.

Property tax fairness credit

Maine is increasing its property tax credit for most homeowners to $1,000 in 2021, up from $750 last year.

Abandoned property

As of Oct. 18, municipalities will be able to put abandoned property up for auction more quickly. New procedures allow them to declare residential properties on which back taxes are owed as abandoned in 6 months instead of the current 5 years.