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CCH® PAYROLL — 03/19/10

Maine issues guidance on military spouses

For tax years beginning on or after January 1, 2010, a military spouse may claim exemption from Maine income tax withholding with respect to wages, salaries and other compensation received for services performed in Maine as an employee if such compensation is excluded from Maine source income under MSRRA. To claim the exemption, the military spouse must complete Form W-4ME, line 6e (see revised Form W-4ME at http://www.maine.gov/revenue/).

To qualify for the exemption, the military spouse must attach a copy of the servicemember’s latest Leave and Earning Statement (LES) to Form W-4ME. From information on the LES, the employer must ensure that the assignment is at a location in Maine. The military spouse must also present a valid military ID as proof that the employee is a spouse of a servicemember. The employer may NOT accept a military ID dated more than four years before the date on which it is given to the employer.

The employer may not accept an exemption certificate if the employer has actual knowledge, or reason to know, that the military spouse does not meet the requirements to be exempt. In this case, the employer must continue to withhold.

The military spouse exemption claimed on Form W-4ME, line 6e automatically expires at the end of the calendar year in which it is submitted, at which time the military spouse must submit a new Form W-4ME or become subject to Maine withholding using a filing status of single with one exemption.

(Maine Tax Alert Vol. 20 No. 3, March 2010 Issue 2.)

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