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26 August 2026

Maine updates income tax withholding formula for new tax on income that exceeds $1 million

Maine Revenue Services updated its withholding tables/formula to reflect the added personal income tax on individual income that exceeds $1 million ($1.5 million for joint filers and heads of households). The change applies retroactively to January 1, 2026 under L.D. 2212.

Employers must implement the revised withholding tables/formula as soon as possible.

Supplemental wages

If supplemental wages (such as bonuses, commissions, overtime pay, etc.) are paid separately from regular wages, employers may withhold at a flat rate of 5%.

Ernst & Young LLP insights

Employers should consider notifying employees living and/or working in Maine of the potential increase in their personal income tax liability for 2026 and suggest they review their Form W-4ME, Employee's Maine Withholding Certificate, to determine if updates are needed.

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Lori E. Ruppert, legal editor

Document ID: 2026-1830

 

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