Tax Guide
Maine State Taxes Explained
Income tax, property tax, sales tax, and every exemption worth knowing before you move — in plain language, not tax code.
0%
Tax on Social Security
5.5%
Sales tax (no food/Rx)
$25K
Homestead property exemption
7.15%
Top income tax rate
Income Tax
Maine has a graduated income tax with three brackets. The top rate of 7.15% is lower than Massachusetts (9%), New York (up to 10.9%), and Connecticut (6.99% top — but with fewer deductions).
| Filing Status | Taxable Income | Rate |
|---|---|---|
| Single | $0 – $24,500 | 5.8% |
| Single | $24,500 – $58,050 | 6.75% |
| Single | $58,050+ | 7.15% |
| Married Filing Jointly | $0 – $49,050 | 5.8% |
| Married Filing Jointly | $49,050 – $116,100 | 6.75% |
| Married Filing Jointly | $116,100+ | 7.15% |
Standard deduction: $13,850 (single) / $27,700 (married filing jointly) — matching the federal standard deduction. Most moderate-income Maine residents pay an effective rate well below the top marginal rate.
Key Exemptions & Credits
Maine has built in meaningful exemptions that reduce the real tax burden — especially for retirees, families, and rural residents.
Social Security Income
Fully ExemptMaine does not tax Social Security benefits at the state level.
Military Pension
Fully ExemptAll military retirement pay is exempt from Maine income tax.
State & Federal Pensions
Up to $30,000A deduction of up to $30,000 for qualifying pension income.
401(k) / IRA Withdrawals
$10,000 deductionOther retirement income gets a $10,000 deduction if pension deduction is unused.
Groceries & Food
No sales taxUnprepared food purchased for home consumption is fully exempt from Maine's 5.5% sales tax.
Prescription Drugs
No sales taxAll prescription medications are exempt from Maine sales tax.
Student Loan Payments
Dollar-for-dollar creditThe Student Loan Repayment Tax Credit (SLRTC) gives a state income tax credit equal to student loan payments, up to the annual cap. Refundable for STEM and Maine college graduates.
New Business Equipment
Fully ExemptThe BETE program exempts all new qualified business equipment from property tax.
Property Tax
Maine's effective property tax rate of 1.09% sits near the national average — and well below New Hampshire (1.86%), New Jersey (2.47%), or Connecticut (1.79%). Combined with significantly lower home values than southern New England, the actual dollar amount is often dramatically lower.
Average Effective Rate
1.09%Slightly above national average but well below MA (1.14%), NH (1.86%), NJ (2.47%)
Homestead Exemption
$25,000Off assessed value for primary residence owners. Apply through your local assessor.
Property Tax Fairness Credit
Up to $1,500Refundable credit for homeowners or renters whose property tax burden exceeds 4% of income
BETE Program
VariesBusiness Equipment Tax Exemption — all new business equipment is exempt from property tax
Maine vs. Neighboring States
| State | Top Income Rate | Property Rate | Sales Tax | No Food Tax |
|---|---|---|---|---|
| Massachusetts | 9.0% | 1.14% | 6.25% | Yes |
| New York | 10.9% | 1.54% | 4–8.875% | Yes |
| Connecticut | 6.99% | 1.79% | 6.35% | No |
| New Hampshire | 0% (no income tax) | 1.86% | 0% | Yes |
| Maine | 7.15% | 1.09% | 5.5% | Yes |
Don't Miss This
Maine Pays Your Student Loans Too
The Opportunity Maine Tax Credit gives you a dollar-for-dollar state income tax credit on every student loan payment — up to the full balance of your loans. STEM graduates get a refundable version even if they owe no taxes.
Read the Full GuideVoted Best Moving to Maine Guide — Updated for 2026
The Maine Relocation Guide
Includes a full tax planning section — income tax estimates by household type, property tax by town, and a complete list of exemptions with how to claim them.
Get the Guide — Pay What You Want