The Board also reasoned that after application of all available credits in Connecticut, the Maine resident had no Connecticut individual income tax liability that would trigger the Maine resident credit.
On appeal, the Board rejected the resident’s argument that the Connecticut PTET was “functionally a tax upon his own personal income,” finding that the Maine credit statute is limited by its terms to taxes imposed on individuals. While Maine statutes generally allow residents a credit for taxes paid to other states on income that is also taxed by Maine, Maine Revenue Services denied the credit. The resident filed a Maine income tax return, claiming a credit against his Maine income tax liability for the PTET that his company paid to Connecticut. After the credit, the Maine resident had no income tax liability to Connecticut. In 2018, the company was subject to Connecticut’s mandatory PTET and the Maine resident received an offsetting credit against his Connecticut income tax liability. 1, 2021), the resident owned a Connecticut limited liability company that elected to be treated as an S corporation.
In the redacted Maine decision at docket no.
While technically not guidance from Connecticut, a recently released decision of the Maine Board of Tax Appeals considered the Connecticut pass-through entity tax (PTET) and held that a resident of Maine was not entitled to reduce his Maine personal income tax liability with a credit for PTET paid to Connecticut in 2018. In this installment of the Tristate Tax Alert we have news on New Jersey’s CBT Schedule G-2 (Claims for Exceptions to Disallowed Interest and Intangible Expenses and Costs), guidance from New York City on Hurricane Ida penalty relief, as well as a guest appearance from the state of Maine, which recently considered Connecticut’s pass-through entity tax regime.
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