Maine has a three-bracket income tax: 5.8% (up to $26,050 single), 6.75% ($26,051–$61,599), and 7.15% (above $61,600). Maine has a 5.5% state sales tax, but exempts food for home consumption and most clothing — keeping the effective burden lower than the headline rate suggests. Property taxes average 1.09% effective rate — moderate. Maine provides a $10,000 pension deduction for public pensions and a separate deduction for Social Security. The Pine Tree State has no estate tax threshold below $6.8M (2024).
At a glance
Key Facts
State Income Tax
5.8% ($0–$26,050), 6.75% ($26,051–$61,599), 7.15% (above $61,600) for single filers; 2024 brackets
Sales Tax
5.5% state rate; groceries (unprepared food) and most clothing exempt; 8% on prepared food, lodging, and car rentals
Property Tax
1.09% average effective rate; significant variation by town; Property Tax Fairness Credit up to $1,500 for lower-income homeowners
Pension Deduction
$10,000 deduction for military and government pension income; $6,000 deduction for all other pension/retirement income for those age 65+
Social Security
Partially exempt — Maine provides a deduction for a portion of Social Security; full exemption for those with income below ~$30,000
Estate Tax
Maine estate tax: 8–12% on estates above $6.8M (2024); Maine has one of the lower estate tax thresholds among states with an estate tax
Introduction
Maine has a relatively high income tax burden by regional standards, with a 7.15% top rate on income above $61,600. However, Maine's targeted exemptions — no sales tax on groceries and clothing, pension income deductions, and the Property Tax Fairness Credit — reduce the burden for middle and lower-income residents. Maine's economy is heavily driven by tourism (lobster, Maine maritime tradition), forestry, and a growing remote-work population attracted by natural beauty and relative affordability compared to southern New England.
Maine has the distinction of being the most rural state east of the Mississippi and has been particularly active in attracting remote workers — including a targeted program to attract workers to rural Maine with tax incentives. Understanding Maine's tax environment is increasingly relevant for the growing remote-work community choosing Maine as a home base.
Section 01
Maine Income Tax: Brackets, Retirement Deductions, and the Pension Exemption
Maine's income tax system is progressive with three brackets. The 7.15% top rate is above the national average for state income taxes but below the rates of the highest-tax Northeast states (Massachusetts, New York, Connecticut).
Maine Income Tax Brackets 2024–2026
Taxable Income (Single)
Rate
Taxable Income (MFJ)
$0 – $26,050
5.8%
$0 – $52,100
$26,051 – $61,599
6.75%
$52,101 – $123,249
Above $61,600
7.15%
Above $123,250
Maine indexes brackets to inflation annually.
Maine Standard Deduction
Maine follows the federal standard deduction: $14,600 for single filers and $29,200 for married filing jointly (2024). Maine provides a personal exemption of $4,700 per person (2024).
Pension and Retirement Income Deductions
Maine provides targeted deductions for retirement income:
Military retirement + government pensions: $10,000 deduction for qualifying military and government pension income
All other pension income (age 65+): $6,000 deduction per taxpayer on pension, IRA, and 401(k) income for those age 65 and older
Social Security: Maine provides a deduction based on federal AGI; those with AGI below approximately $30,000 may fully exclude SS; the deduction phases out at higher incomes
Maine's Remote Worker Tax Incentive
Maine's Rural Opportunity Zone program offers income tax refunds (up to $15,000 over 5 years) for student loan repayments for qualified workers who move to designated rural Maine counties. This is designed to attract and retain younger workers in rural areas experiencing population decline.
Section 02
Maine Sales Tax: 5.5% with Food and Clothing Exemptions
Maine's 5.5% sales tax rate is below the national average, and Maine provides important exemptions that meaningfully reduce the effective burden for residents:
Groceries: Unprepared food for home consumption is fully exempt from sales tax — Maine does not tax groceries
Clothing: Most clothing and footwear is exempt from Maine sales tax (similar to New York and Minnesota)
Prescription drugs: Exempt
Prepared food and restaurant meals: Taxed at 8% (higher rate applies)
Unlike most states, Maine has no local sales tax — the 5.5% state rate is uniform throughout the state. This significantly simplifies compliance and means there are no 'high-tax city' anomalies. Visitors to Portland, Augusta, or Bangor all pay the same 5.5% (with the various exemptions above).
Maine Meals Tax: Tourism Impact
Maine's 8% meals and restaurant tax is relevant given the state's significant tourism economy. Restaurant meals, prepared food, and lodging all face higher rates — a revenue strategy that allows the state to tax tourism activity more than resident consumption.
Section 03
Maine Property Tax, Property Tax Fairness Credit, and Homestead Exemption
Maine property taxes average approximately 1.09% effective rate — moderate by New England standards (much lower than New Hampshire's 1.93%, Vermont's 1.74%, or Connecticut's 1.79%). Maine municipalities set their own mill rates. Property taxes in Maine are used heavily to fund local education and municipal services.
Property Tax Rates by County
County
Effective Rate
Annual Tax on $300K Home
Cumberland County (Portland)
~1.14%
~$3,420
York County (Biddeford, Saco)
~1.17%
~$3,510
Penobscot County (Bangor)
~1.37%
~$4,110
Kennebec County (Augusta)
~1.28%
~$3,840
Androscoggin County (Lewiston)
~1.43%
~$4,290
Maine Property Tax Fairness Credit
Maine provides a refundable Property Tax Fairness Credit for lower and moderate-income homeowners and renters. The credit is calculated based on income relative to property taxes paid: if property taxes (or 25% of rent, as a proxy for property taxes in rent) exceed a percentage of income, the excess is eligible for the credit — up to $1,500 for most filers, $1,000 for those under 70. This is a meaningful relief program for lower-income Maine residents in high-property-tax towns.
Maine Homestead Exemption
Maine provides a $25,000 homestead exemption from assessed value for permanent primary residences. At a typical mill rate, this saves approximately $275–$430/year in property tax, depending on the municipality.
Maine Estate Tax
Maine imposes its own estate tax on estates above $6.8 million (2024), at rates of 8–12%. This is below the federal exemption threshold ($13.61M) — meaning some estates that don't owe federal estate tax still owe Maine estate tax. This is particularly relevant for business owners, farmers, and those with significant Maine real estate. Maine has become less competitive vs New Hampshire (no estate tax) and Florida (no estate tax) for high-net-worth individuals considering retirement relocation.
Remote workers and expats with foreign income alongside Maine residency face complex multi-jurisdiction situations. Greenback specialises in international and cross-border tax.
⚠ Not the cheapest option — best for complex situations and expats who want a dedicated CPA.
Maine has three income tax brackets: 5.8% on taxable income up to $26,050 (single) or $52,100 (married), 6.75% on $26,051–$61,599 (single) or $52,101–$123,249 (married), and 7.15% on income above those thresholds. Maine indexes these brackets to inflation annually. The 7.15% top rate is higher than many states but lower than Massachusetts (9% surtax on income above $1M), New York (10.9%), and Connecticut (6.99%).
Q
Does Maine have a sales tax on groceries and clothing?
No — Maine exempts groceries (unprepared food for home consumption) and most clothing from the 5.5% state sales tax. This makes Maine's effective sales tax burden lower than its headline rate suggests. Maine has no local sales tax — 5.5% is the uniform statewide rate. Restaurant meals and prepared food are taxed at 8%, hotels at 9%, and car rentals at 10%.
Q
Does Maine have an estate tax?
Yes — Maine imposes a state estate tax on estates valued above $6.8 million (2024 threshold), with rates of 8–12%. This is notably below the federal estate tax exemption of $13.61 million, meaning some Maine estates pay state estate tax but no federal estate tax. The Maine estate tax is a consideration for farmers, business owners, and property-wealthy individuals planning their estates. New Hampshire (no estate tax) is often cited as a comparison for Maine residents concerned about estate taxes.
Q
How is Social Security taxed in Maine?
Maine provides a deduction for Social Security benefits from Maine taxable income. The deduction amount depends on federal AGI: residents with lower incomes may fully deduct Social Security; the deduction phases out at higher incomes. Maine's treatment is more generous than states that tax Social Security at full rates (like Minnesota) but less generous than states that fully exempt Social Security regardless of income.
Q
What is Maine's Property Tax Fairness Credit?
Maine's Property Tax Fairness Credit is a refundable credit for lower and moderate-income homeowners and renters. If your property taxes (or rent × 25% as a proxy) exceed a threshold percentage of your income, the excess is eligible for a credit worth up to $1,500. The credit is refundable — meaning you receive it as a tax refund even if you owe no Maine income tax. It's particularly valuable for older residents on fixed incomes in high-property-tax towns.
Disclaimer:This guide provides general tax information for educational purposes only. Maine income tax rates, brackets, and exemptions are subject to legislative change and annual indexing. Property tax rates vary by municipality. Always consult a qualified Maine tax professional for advice specific to your situation.