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11. How do I complete Schedule 3?

You must file a Maine long form in order to claim a credit for taxes paid to another jurisdiction on Maine Schedule 3.

If you were a resident of Maine (excluding "safe harbor" residents) during the tax year, and received income that was taxed during the year by another state, you may claim a credit for income taxes paid to another jurisdiction on Schedule 3.

Read the instructions for Schedule 3 in the Maine income tax booklet carefully before completing Schedule 3.

Always complete the other state’s income tax return before completing the Maine return. You must submit a copy of the other state’s return with your Maine return.

When completing line 12b, entitled “Income taxes paid other jurisdiction,” do not write the amount of withholdings paid to another state on this line. Instead, write the actual tax liability due to the other state on this line. That amount is usually the amount of the other state’s withholdings, plus any additional money you owed them when you filed your return, or less any refund you are entitled to from the other state.

If you paid income taxes to a number of states, complete a separate Schedule 3 for each state. Add the resulting tax credits together when reporting the allowable credit on Maine Schedule A.

Generally, you cannot claim both a Schedule 3 credit for taxes paid to another jurisdiction and a Schedule NR nonresident credit on the same return. However, if you are a part-year resident, and you earned income as a resident of Maine that was also taxed by another state, you may be eligible to claim both credits. Complete Schedule NR first. Then complete Schedule 3 based only on the portion of your income that was earned as a resident of Maine.

Additional written instructions are available to help you complete Schedule 3 at http://www.maine.gov/revenue/forms/1040/2007/07Schedule3Guide.pdf