If you remember, last month I started my series of columns on the various investments that the Appropriations and Financial Affairs Committee and the Legislature made in Maine people. For education, we created the Education Rainy Day Fund, made two years of community college education free, and froze tuition at the University of Maine System. In this column, I want to discuss another important investment: tax relief. With historic inflation driving up the costs of gas, groceries, homes and rent, tax relief is more critical than ever. We know that people have been feeling pain in their pocketbooks, but help is here.

First off, the budget gave income tax breaks for retired Maine residents. It increases the annual income tax pension deduction to $25,000 for all retired Maine residents. This includes yearly $5,000 increases until it reaches $35,000. Previously, Maine retirees could only deduct $10,000 from their state income taxes. In other words, the maximum deduction will more than triple over three years, which will make a real difference for Mainers who have worked hard their entire lives and deserve to enjoy the blessings and benefits of earned retirement.

Second, we continued offering property tax relief for working families and older Mainers. The budget permanently expands the property tax fairness credit to give eligible working families and older Mainers much-needed relief on property tax or rent. The maximum benefit is $1,000 each year for those under 65, and $1,500 for those over 65. An estimated 100,000 property owners and renters will benefit from this change. Among other criteria, you will need to file a 2021 Maine individual income tax return (Form 1040 ME) and Schedule PTFC/STFAC to become eligible. For help with filing those forms, please contact Maine Revenue Services at (207) 624-9784 on weekdays from 9 a.m. to 12 p.m. You can also send an email to income.tax@maine.gov. Mainers with low or moderate incomes can contact CA$H Maine for assistance with filing tax forms. Please visit www.cashmaine.org or call 2-1-1 to find help.

Finally, the budget gave tax credits to working families. It increased the state earned income tax credit from 25 percent to 50 percent of the federal earned income tax credit for individuals with no qualifying children. The increase in the state earned income tax credit doubles, from 12 percent to 25 percent of the federal earned income tax credit, for all other eligible individuals. For those who don’t know, the earned income tax credit (EITC) helps workers and families with low or moderate incomes reduce the taxes they owe and even increase the refund they get. If your family earns less than $57,414 per year, then you could get a total benefit, on average, of $764. To learn more about the EITC, please visit irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc. For help with the state earned income tax credit, please call Maine Revenue Services at (207) 626-8475 on weekdays from 9 a.m. to noon.

Although we provided targeted tax relief for Mainers, we know that we have more work to do. Tax relief keeps Mainers in Maine, and helps attract people from away. Hopefully, the relief that’s available now will help a lot of people while we think about what we can do when we come back next session.

I am deeply honored to represent you and your family in Augusta. If you have questions, or need assistance, please don’t hesitate to contact me at Donna.Bailey@legislature.maine.gov or (207) 287-1515. I hope that you had a wonderful Memorial Day, and that you are getting ready for another one of our beautiful Maine summers.