Maine's income tax reaches 7.15% on taxable income above $64,850 (single) for 2026, and 9.15% above $1,000,000 single / $1,500,000 joint (a new 2% millionaire surtax) — one of the higher top rates in New England. Maine fully exempts Social Security income and allows a pension income deduction of up to $49,824 per person for 2026 (reduced by Social Security received). Military retirement pay is fully deductible. Maine has no sales tax on food. Property taxes average ~0.98%. Moving to New Hampshire (no income tax on wages) eliminates Maine's income tax on wages and investment income — the most common and financially significant move for Maine residents.
At a glance
Key Facts
Maine Income Tax Brackets (2026)
5.8% (up to $27,400 single / $54,800 MFJ); 6.75% ($27,400–$64,850 single / $54,800–$129,700 MFJ); 7.15% (above $64,850 single / above $129,700 MFJ, up to $1,000,000 single / $1,500,000 MFJ); 9.15% above those levels. Maine's 7.15% rate kicks in at a relatively modest income threshold — a single filer with taxable income above $64,850 is in that bracket.
Social Security Taxation
Maine fully exempts Social Security: benefits included in federal adjusted gross income are subtracted from Maine income at every income level. Social Security received does reduce the size of Maine's pension income deduction.
Military Retirement
Maine fully deducts military retirement pay included in federal adjusted gross income, with no Social Security reduction and no AGI phase-out.
Property Tax
Maine property tax effective rate approximately 0.98% — above the national average. Maine's property tax varies significantly by county: coastal areas (York County, Cumberland County near Portland) have higher assessed values and higher absolute bills. Maine's circuit breaker credit (Property Tax Fairness Credit) provides refundable credits for lower-income homeowners. Homestead Exemption: $25,000 reduction in assessed value for owner-occupied primary residences.
No Sales Tax on Food
Maine exempts most food for home consumption from the 5.5% state sales tax. Maine's sales tax rate (5.5%) is one of the lower state rates in the Northeast.
No Estate or Inheritance Tax
Maine has no inheritance tax. Maine's estate tax exemption is $6,800,000 (2024) with rates up to 12% — a relatively generous exemption by state standards. Most Maine estates are not affected by the estate tax.
Introduction
Maine has the highest top income tax rate in New England at 9.15% (a 7.15% rate plus a 2% surtax on income above $1,000,000 single / $1,500,000 joint, effective January 1, 2026; Vermont's top rate is 8.75%). Maine is a high-tax state relative to its size and economy, with a compressed upper bracket that kicks in at $64,850 of taxable income for single filers. Maine fully exempts Social Security, allows a pension income deduction of up to $49,824 per person for 2026, fully exempts military retirement pay, and levies property taxes well above the national average. The nearby presence of New Hampshire — which has no income tax on wages or retirement income — creates a clear migration incentive for higher-income Maine residents, particularly in the southern Maine / Portsmouth NH corridor. This guide covers what Maine residents considering a move need to know.
Section 01
Maine vs New Hampshire: The Key Tax Comparison
Maine's proximity to New Hampshire makes the comparison particularly relevant — southern Maine residents in the Portland, Portland-South, and York County areas often live within commuting distance of New Hampshire.
Income Tax Difference
New Hampshire taxes only interest and dividend income (at 4% declining to 3% by 2025 and 0% by 2027 under HB 2 2021 phase-out). It has zero income tax on wages, salaries, retirement income, and capital gains. Maine taxes wages, capital gains and most retirement income at up to 7.15% (9.15% above $1,000,000 single). For a Portland, Maine remote worker earning $120,000 (single filer, wages only): Maine income tax approximately $6,559 (using the full $21,000 standard deduction and personal exemption; Maine phases the standard deduction out above $102,250 of AGI, so the actual figure is somewhat higher) vs New Hampshire: $0 (wages) + $0 (capital gains) = $0. Annual savings by moving to Portsmouth NH: approximately $6,559 or a little more per year.
Property Tax
New Hampshire's effective property tax rate (~1.50%) is actually higher than Maine's (~0.98%). Moving from Portland, Maine to Portsmouth, NH may increase property tax while eliminating income tax. The net benefit depends heavily on the property value and income level. For a $500,000 home: Maine property tax ~$4,900 vs NH ~$7,500 — Maine is actually cheaper on property. The income tax savings (above ~$70,000 income) typically outweigh the property tax increase for professional earners.
Retirees: Social Security and Pension Income
Maine is moderately retirement-friendly. Social Security is fully exempt. Pension, IRA and employee-plan income can be deducted up to $49,824 per person (2026), reduced by Social Security received and phased out at higher federal AGI, and military retirement pay is fully deductible; retirement income above the available deductions is taxed at regular Maine rates. New Hampshire: $0. Florida: $0 and property tax roughly 20% lower than Maine.
Section 02
Maine Residency Exit Rules
Maine uses standard domicile-based residency:
Maine Residency
Maine defines a resident as someone domiciled in Maine, or a non-domiciliary who maintains a permanent place of abode in Maine and is present for more than 183 days during the tax year. To exit Maine residency: establish domicile in the new state (driver's license, voter registration, primary home), change vehicle registration, update estate documents. Maine does not have an aggressive post-departure audit reputation.
Part-Year Returns
In your departure year, file Maine Form 1040ME (part-year resident return) covering income earned during Maine residency. Maine-source income after departure (Maine rental property, Maine business income) remains taxable as non-resident income. Maine's Homestead Exemption ($25,000 assessed value reduction) is available only for owner-occupied primary residences — if you move out of Maine but retain Maine property, you lose the Homestead Exemption on that property (it becomes non-primary-residence).
Maine domicile changes, snowbird residency questions, Social Security optimization, and partial-year returns require CPA guidance. TaxHub connects you with state tax specialists.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Maine residents moving abroad face state residency termination and US expat filing requirements. Greenback specialises in US expat state tax exit planning.
⚠ Not the cheapest option — best for complex situations and expats who want a dedicated CPA.
Does Maine tax out-of-state pension income for Maine residents?
Partly — Maine taxes pension income (private and government pensions, IRA distributions, 401(k) distributions) at regular Maine rates (up to 7.15%, or 9.15% above $1,000,000 single), but it allows a pension income deduction of up to $49,824 per person for 2026 on pension, IRA and employee-plan income (distributions taken before age 55 generally do not qualify). The deduction is reduced dollar for dollar by Social Security and railroad retirement benefits received and phases out at higher federal AGI, and military retirement pay is fully deductible. Retirement income above the available deduction is taxed as ordinary income, which can still make Maine less favorable than states with no income tax. New Hampshire residents pay zero state income tax on all retirement income sources — a compelling comparison for Maine retirees within commuting distance of the NH border.
Q
Is Maine's 'snowbird' population affected by Maine residency rules?
Maine residents who spend winters in Florida (a common pattern) face Maine residency questions. Maine's 183-day rule means that if you are present in Maine for more than 183 days in a tax year while maintaining a permanent place of abode in Maine, you are a Maine resident for tax purposes regardless of where else you spend time. If you sell your Maine home and establish Florida domicile (driver's license, voter registration, Florida home), spending less than 183 days in Maine, you can exit Maine residency. However, retaining a Maine summer home while establishing Florida domicile requires careful documentation that Florida — not Maine — is your true domicile. Maine does audit cases where significant Maine presence is combined with claimed out-of-state domicile, particularly for high-income individuals.
Q
How does Maine's income tax compare to Massachusetts?
Massachusetts has a 5% flat income tax rate (with a surtax of 4% on income above $1,000,000 — the 'Millionaires Tax' enacted 2023). Maine's 7.15% rate exceeds Massachusetts's standard 5% rate significantly. For a Maine resident earning $100,000: Maine income tax approximately $5,129 (single filer, standard deduction and personal exemption). Massachusetts income tax: approximately $4,780 (5% after the $4,400 personal exemption, as used on our calculator pages). Maine is more expensive than Massachusetts for upper-middle earners. For income above $1,000,000: Maine's 9.15% top rate (7.15% plus the 2% surtax above $1,000,000 single) slightly exceeds Massachusetts's 9% effective rate (5% + 4% surtax). Property taxes: Massachusetts (~1.00%) is now slightly higher than Maine (~0.98%) — the two are essentially tied. Overall, Maine is a higher-tax state than Massachusetts for most income levels below $1,000,000, despite having lower name recognition as a high-tax state.
Disclaimer:This guide provides general tax information for educational purposes only. Maine income tax brackets and Social Security deduction thresholds are subject to legislative change. This is not tax advice. Consult a CPA for Maine-specific tax planning.