Volume 29, Issue 9		November 2019

Maine Revenue Services (“MRS”)
Due Date for Information Returns

MRS is reminding employers that copies of payee statements (federal Forms W-2 and 1099) required to be filed, or that are filed voluntarily, with MRS must be filed electronically no later than January 31st following the calendar year for which the payee statements relate.  MRS does not accept paper copies of payee statements.  Also, the January 31st filing deadline is not subject to extension.

MRS requires the following to electronically submit copies of the following forms with MRS:

Truncating Social Security Numbers (“SSNs”)
on Certain Information Returns to Employees

Recent amendments to U.S. Treasury Regulations promulgated under Section 6051 and 6052 of the Internal Revenue Code permit employers to voluntarily truncate SSNs on federal Form W-2 (“Wage and Tax Statement”) and federal Form W-2C (“Corrected Wage and Tax Statement”) furnished to employees.  However, copies of federal Forms W-2 and W-2C furnished to the IRS or Social Security Administration must include the employee’s full SSN.

Similarly, for Maine purposes, federal Forms W-2 and W-2C provided to MRS by the employer or an agent of the employer must include the employee’s full SSN.

Truncation of the Employer Identification Number is not permitted on these forms.

Changes to Maine Form W-4ME

MRS is in the process of drafting updates to Maine Form W-4ME for 2020 in response to proposed changes to the IRS Form W-4 for 2020.  The draft 2020 IRS Form W-4 has been redesigned to eliminate the use of personal allowances to determine federal income tax withholding.  As a result, the 2020 Maine Form W-4ME will no longer use federal personal allowances as a starting point for calculating the number of personal allowances for Maine income tax withholding purposes.  MRS expects to post to its website a final version of the 2020 Form W-4ME in late November or early December.  MRS will issue an announcement in the Maine Tax Alert when the 2020 form is posted.

Employees who have submitted Maine Form W-4ME in any year before 2020 are not required to submit a new form merely because of the updates.  Employers will continue to compute withholding based on the information from the employee’s most recently submitted Maine Form W-4ME.

Fiscal Agents for Employer Withholding

A new provision in Maine law, 36 M.R.S. §§ 5250(5), provides that fiscal agents designated in accordance with Section 3504 of the Internal Revenue Code to perform acts required of employers may, at the discretion of the State Tax Assessor, be designated to perform acts required of employers for purposes of complying with Maine’s employer wage withholding law.  Designations approved by the Assessor will only be granted for tax periods beginning after 2019.  Approved fiscal agents are subject to the same requirements and liabilities imposed on their client employers. 

Fiscal agents planning to act for their client employers within the meaning of 36 M.R.S. § 5250(5) will need to register with MRS by submitting the Registration Application available at www.maine.gov/revenue/forms (click on General Forms).  Complete Sections 1 and 2 of the application, check the box in Section 2, line 9 for fiscal agents and follow all other relevant instructions for registration.  Upon receipt of the application, MRS will contact the fiscal agent to request additional information and required documents to complete the registration process.  MRS will also inform the fiscal agent of special tax filing and payment requirements, as well as other legal and administrative responsibilities of a fiscal agent designated under 36 M.R.S. § 5250(5).

MRS Guidance Regarding Certain Non-taxable
Streaming Subscription Services Over the Internet

Maine Revenue Services has revised Instructional Bulletin 55, “Service Provider Tax,” to clarify that Maine Service Provider Tax does not apply to streaming subscription services over the internet, including streaming subscription services for music, radio, and video.  This is because such streaming services do not meet the definition of “cable and satellite television or radio services” under 36 M.R.S. § 2551(2) or the definition of “video media” under 36 M.R.S. § 2551(21).  In addition, these temporary and conditional access streaming subscription services are not subject to Maine Sales Tax as sales of “tangible personal property” and “product[s] transferred electronically” within the meaning of 36 M.R.S. §§ 1752(9-E) and 1752(17).

If taxable income is:			The tax is:
Less than $44,450			5.8%	of Maine taxable income
$44,450	but less than	$105,200	$2,578	plus 6.75% of excess over	$44,450
$105,200	or more		$6,679	plus 7.15% of excess over	$105,200

Single $12,400	Married Filing Jointly - $24,800
Head of Household - $18,650	Married Filing Separately - $12,400