TAXES 21-06, Maine State Income Tax Withholding

Published: February 8, 2021
Effective: Pay Period 03, 2021

Summary

The income tax withholding formula for the State of Maine includes the following changes:

The Single and Married standard deduction tables have changed.
The Single and Married income tax withholding tables have changed.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:	ME
State Tax Withholding State Code:	23
Acceptable Exemption Form:	W-4ME
Basis for Withholding:	State Exemptions
Acceptable Exemption Data:	S/M, Number of Exemptions
TSP Deferred:	Yes
Special Coding:	Determine the Total Number of Allowances Claimed field as follows: First Position - S = Single; M = Married Second and Third Positions - Enter the number of allowances claimed. If less than 10, precede with a 0 (zero).
Additional Information:	In the event that the employee does not file a State withholding allowance certificate, then Single and zero allowances (S00) will be used as the basis for withholding.

Withholding Formula (Effective Pay Period 03, 2021)

Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
Subtract the nontaxable biweekly Federal Employees Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account — health care and dependent care deductions) from the amount computed in step 1.
Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.

Subtract the standard deduction adjustment from the following tables, based on marital status, from the annualized gross pay to get adjusted annualized gross pay:

Single Taxpayer

Annualized Gross Pay	Standard Deduction Adjustment
Over $0 but not over $83,850	$9,700
Over $83,850 but not over $158,850	[($158,850 - Taxable wages) / $75,000] x $9,700
Over $158,850	$0

Married Taxpayer

Annualized Gross Pay	Standard Deduction Adjustment
Over $0 but not over $167,700	$22,250
Over $167,700 but not over $317,700	[($317,700 - Taxable wages) / $150,000] x $22,250
Over $317,700	$0

Determine the exemption allowance by applying the following guideline and subtracting this amount from the results in step 5 to compute the taxable income:
Multiply the number of Allowances by $4,300.

Apply the taxable income in step 6 to the following tables to determine the annual Maine tax withholding:

Single Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
Over $0 but not over $22,450	5.8%
Over $22,450 but not over $53,150	$1,302.00 plus 6.75% of excess over $22,450
Over $53,150	$3,374.00 plus 7.15% of excess over $53,150

Married Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
Over $0 but not over $44,950	5.8%
Over $44,950 but not over $106,350	$2,607.00 plus 6.75% of excess over $44,950
Over $106,350	$6,752.00 plus 7.15% of excess over $106,350

Divide the annual Maine income tax withholding calculated in step 7 by the number of pay dates in the tax year, and round to the nearest dollar to obtain the biweekly Maine income tax withholding.
Add the additional amount or percentage elected by the employee to the pay period tax calculated in the above step and round to the nearest dollar to determine the amount of tax to be withheld for this pay period.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

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