Tax Insight

Maine updates IRC conformity, treatment of Sections 174/168(n)

Insight
5 minute read
April 28, 2026

What happened?

Under legislation (H.P. 1491) enacted on April 10, Maine has codified certain changes announced by Governor Janet Mills (D) for the 2025 tax year, including addition modifications related to federal expensing of domestic research and experimental (R&E) expenditures and qualified production property. The legislation provides mechanisms for deducting these addback amounts for Maine tax purposes in future years, among other changes.

[L.D. 2212/H.P. 1491 (c. 650), enacted 4/10/2026]

Why is it relevant?

Maine is one example of the states’ continuing reactions to the federal P.L. 119-21, or One Big Beautiful Bill Act (OBBBA). Maine’s enactment includes varying calculations for recapturing addback amounts over multiple years resulting from the state’s nonconformity to these federal provisions.

Actions to consider

Businesses subject to Maine taxation should consider the potential Maine tax impact of these changes on expensing elections taken for federal tax purposes and track required adjustments in affected years.