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01. Do I have to file a Maine estate tax return?

If you answer “yes” to any of the following questions, you must file a Maine estate tax return.

A) Does the estate contain any real property located in Maine?

If there is real property (land or buildings) located in Maine associated with the estate, Form 706ME (or Form 706ME-EZ, if applicable) should be filed with a completed estate tax lien discharge form whether or not estate taxes are owed. These filings are required because at the date of death, an automatic estate tax lien applies to any property located in Maine that is owned by the decedent. The purpose of the lien is to prevent the property from being sold before the estate tax is paid. Filing of Form 706ME or Form 706ME-EZ with a lien discharge form and a tax due, serves as a request to Maine Revenue Services to release the estate tax claim to that property so it can be sold. In certain circumstances, real or tangible personal property held in a pass-through entity or trust by the decedent is considered real or tangible personal property owned by the decedent (see MRS Rule 601).

B) Is the estate going through probate in Maine?

If the estate is subject to the probate process, you must file Form 706ME, whether or not taxes are owed. The probate court in Maine requires a copy of an official letter from Maine Revenue Services certifying that an estate tax return has been filed (Certification of Filing) and that any tax due has been paid.

C) Is the gross estate plus prior taxable gifts plus Maine elective property worth more than the filing requirement threshold?

For deaths occurring in 2006 or later, the filing threshold is $1,000,000. The threshold is $950,000 for deaths in 2005. If the gross estate plus prior taxable gifts plus Maine elective property is worth less than the threshold amount and the answer to questions A) and B) is "no," you probably do not have to file an estate tax return.

The fact that a federal Form 706 is not required does not mean that the estate is not liable for Maine estate tax. More information on Maine's estate taxability threshold for each year can be found at the Estate Tax homepage on our web site at http://www.maine.gov/revenue/incomeestate/estate

(Rev. 9/05/08)

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