08 Maine taxable income computation for spouses filing as single individuals

A married individual who files as a single individual must file the Maine resident long form supplemented by Schedule NRH. In completing Schedule NRH, the following steps must be followed in order to calculate the filing spouse’s share of the income, deductions, and other items, in order to separate Maine-source income or loss from non-Maine-source income or loss and to compute the nonresident credit: A. Individual’s income share. Earned income, including, but not limited to, income from wages, salaries, tips, and other items of value received from an employer for services performed or from self-employment is totally attributed to the spouse so compensated. For other income, if separate accounting has been maintained so that the income, expense and deductions can be separately determined and substantiated, the individual filing must report as if a separate federal return had been filed. Otherwise, the individual’s share is 50% of all other income. B. Income ratio. The ratio of the individual’s share of total income is computed by dividing the individual’s income share as determined in subsection A by the total income reported on the federal married joint return. C. Adjustments to income. Adjustments to income appearing on the federal married joint return for Maine purposes is the actual distribution of adjustments, if 18-125 Chapter 806 page 12 supported by adequate records. Otherwise, apportion adjustments according to the income ratio as determined in subsection B. D. Federal adjusted gross income. Income adjustments determined pursuant to subsection C are deducted from income share determined pursuant to subsection A in order to determine the individual’s federal adjusted gross income. E. Maine adjusted gross income. The Maine adjusted gross income for the individual filing is determined by adding to the federal adjusted gross income calculated in subsection D the individual’s other income share, if any, that is taxable by Maine but not at the federal level, and by deducting any amount included in the federal adjusted gross income that is taxable at the federal level but not by Maine. F. Maine deductions. The individual must elect either the Maine standard deduction for single individuals or the amount of the married joint federal itemized deductions less applicable Maine modifications multiplied by the electing individual’s income ratio (as determined pursuant to subsection B). Instead of applying the individual’s income ratio to the joint itemized deductions, the taxpayer may elect to utilize actual itemized deductions, less applicable Maine modifications, attributable to him or her if supported by adequate records. G. Maine exemptions. The filing individual is entitled to his or her exemption as authorized by 36 M.R.S. § 5126 plus the number of dependent exemptions from the federal married joint return multiplied by the electing individual’s income ratio (as determined pursuant to subsection B. No amount may be claimed for the other spouse’s personal exemption.