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ESTATE TAX LAW CHANGE
The recently adjourned first session of the 124 th Legislature produced a number of tax law changes for income tax and estate tax, notably in the biennial budget and the tax reform package. The Income/Estate Tax Division of Maine Revenue Services is preparing a summary of the enacted tax law changes, which will be published in the July Tax Alert.
There is, however, one change to the Maine estate tax that deserves immediate attention. For deaths occurring on or after January 1, 2009, taxable gifts made within one year prior to death will be subject to the Maine estate tax and must be included in the decedent's Maine taxable estate. Prior taxable gifts subject to the Maine estate tax are those gifts in excess of the federal gift tax exclusion made within one year prior to death. This change was enacted as part of the budget bill (LD 353, PL 2009, c. 213, Part E). This change will necessitate the addition of a new line to Form 706ME, to identify federally taxable gifts made within one year of the date of death. The new line is tentatively intended to be located as pictured below.
Maine Revenue Services will be developing further guidance regarding this and other estate and income tax changes.
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