Maine Estate Tax 2026: $7.16 Million Exclusion, 8% to 12% Rates

Why the statute says $5.6 million and the state says $7.16 million

Most summaries of this tax quote one number and move on. The two sources of that number do not match on their face, and the reason is a section that is easy to miss.

Section 4102(5) is the base. It reads that for estates of decedents dying on or after January 1, 2018, the Maine exclusion amount “means $5,600,000.” Section 4103 builds the bands from whatever that amount is: a tax of “8% of the excess over the Maine exclusion amount” up to the exclusion plus $3,000,000, then $240,000 plus 10%, then “$540,000 plus 12% of the excess over the Maine exclusion amount plus $6,000,000.” The bands therefore move with the exclusion; the dollar widths ($3,000,000 each for the 8% and 10% bands) do not.

Section 4119 does the indexing. Beginning in 2018 the assessor multiplies the section 4102(5) amount by a cost-of-living adjustment “on or about September 15th, for the estates of decedents who die during the succeeding calendar year.” The adjustment is the Chained Consumer Price Index for the 12 months ending June 30 of the preceding year “divided by the Chained Consumer Price Index for the 12-month period ending June 30, 2017,” and a result that is not a multiple of $10,000 is “rounded to the nearest multiple of $10,000.” The legislature's copy of section 4102, which we saved with an extraction date of October 5, 2026, still prints $5,600,000 and has no cross-reference, so a reader who stops there gets the wrong number.

Two earlier regimes sit behind the table. For deaths from January 1, 2013 to December 31, 2015 the exclusion was $2,000,000 (8% to $5,000,000, 10% to $8,000,000, 12% above), and for 2016 and 2017 it followed the federal basic exclusion at $5,450,000 and $5,490,000. The 2023 step is the largest in the series, $400,000 in one year (our arithmetic). The Maine Revenue Services FAQ, revised May 6, 2026, repeats the last four figures as the filing threshold.

What the tax is on estates from $7.16M to $20M

Assumptions, all our arithmetic: a Maine resident, every asset in Maine, no gifts in the last year, no Maine QTIP, and a Maine taxable estate equal to the number in the first column (federal taxable estate on Form 706ME line 1, which is after debts, expenses and the marital and charitable deductions).

There is no cliff. The first $7,160,000 is not a credit that disappears; the 8% starts on the first dollar above it, so a $7,260,000 estate owes $8,000 (our arithmetic). The tax is also low compared with its neighbors because the top rate is only 12%: at $12,000,000 the average rate is 3.53%. Our state-by-state list shows the same $6,000,000 estate owing $0 in Maine and $542,500 in Oregon, and our Minnesota page shows $1,188,600 at $12,000,000 against $424,000 here.

The apportionment line decides what a resident or an out-of-state owner pays

The tax from the table is "gross" tax. Form 706ME then multiplies it by a factor. For a resident the factor is line 6a (real and tangible property in Maine) plus line 6b (all intangible property) divided by line 6, the apportionable base, which is the federal gross estate plus Maine elective property plus gifts of the last year. The statute says the same thing: the tax is multiplied by a fraction whose numerator is “the value of that portion of the decedent's adjusted federal gross estate that consists of real and tangible personal property located in this State plus the value of all intangible personal property.” Intangibles include cash, brokerage balances, life insurance and annuities, and, on the instructions' list, interest and dividends.

For a nonresident, section 4104 uses the same tax “as if the nonresident were a resident” on the whole Maine taxable estate, multiplied by the ratio of Maine real and tangible property to the adjusted federal gross estate, with no intangibles in the numerator. The Maine camp is therefore taxed at the rates the whole estate would reach, which is the part readers miss.

In the last row no 706ME is due: the estate is under $7.16 million and no federal return is required. The estate still has a problem to solve, because Maine places an automatic lien on the camp at death. The FAQ says the representative can use Form 700-SOV, the Statement of Value, with a Certificate of Discharge of Estate Tax Lien to have the lien released so the title can be sold. The lien itself does not attach to property passing by survivorship to a surviving joint tenant who was the decedent's spouse, and it is released 10 years after death (36 M.R.S. 4112).

Credit for tax paid elsewhere. Section 4103(2) lets a resident's estate take a credit for estate or inheritance tax actually paid to another jurisdiction on real or tangible property there, limited to the Maine tax times that property's share of the adjusted federal gross estate. In the Florida example Florida charges no estate tax, so no credit arises; a resident with a building in a state that taxes it could use it. The credit has a second limit in the form instructions: the other state must look through an entity and tax the property as if directly owned. Maine gives no credit for Maine estate tax already paid by another estate on the same property (FAQ question 7).

A camp, a rental or an LLC: when the entity disappears

For a nonresident, section 4104 says that when real or tangible property is owned by a pass-through entity, “the entity must be disregarded and the property must be treated as personally owned by the decedent” in three cases: the entity does not actively carry on a business for the purpose of profit and gain; the ownership was not for a valid business purpose; or the property was acquired other than by a bona fide sale for full and adequate consideration and the decedent kept a power or interest that would bring it into the estate. The instructions for line 6a put the same test in reverse: the estate must include Maine property held in a trust, LLC or other pass-through entity “unless that property is acquired through a bona fide sale for full and adequate consideration, the ownership of the property in the entity is for a valid business purpose and the entity actively carries on a business for the purpose of profit and gain.”

What that means for a reader is a question of facts: an LLC that owns a family camp and rents it to no one fails the first test; a rental company that signs leases, collects rent and pays a manager has a stronger case, though the statute leaves it to the assessor and the Rule 603 guidance and we found no safe-harbor figure. We do not read this as a prediction for any particular entity, and an LLC formed to hold a home for family use is the clearest case of what the language is aimed at. Our LLC for rental property guide explains the liability side of that choice; this page covers only the estate-tax look-through.

The one-year gift add-back

Maine has no gift tax, and its look-back is short. Section 4102(7)(C) increases the federal taxable estate by “the value of all taxable gifts as defined under the Code, Section 2503 made by the decedent during the one-year period ending on the date of the decedent's death,” notwithstanding IRC 2035. Gifts that qualify for the annual exclusion are not taxable gifts. The same gifts are added to the adjusted federal gross estate for the filing test and the apportionment base.

The window is one year in Maine against three years in Minnesota and New York, so a lifetime gift works better here than there. Whether to make one is a federal gift-tax and income-tax question first: a gift carries over the donor's basis and gives up the step-up (see our Form 709 guide and our step-up in basis page).

Couples: no portability, but a Maine-only QTIP

We found no provision in sections 4102 to 4104 that carries an unused Maine exclusion to a surviving spouse. Maine instead allows its own QTIP election: property that would qualify under IRC 2056(b)(7) can be deducted on Form 706ME line 2 even if no federal election is made. For 2026 deaths the maximum is $7,840,000 ($15,000,000 minus $7,160,000), and the property comes back as Maine elective property in the survivor's estate.

The first row taxes a $14,000,000 estate at 12% on the $840,000 above $13,160,000, which is $100,800 on top of $540,000. The second uses the $7,160,000 at the first death and leaves $6,840,000 below the line at the second (our arithmetic, which ignores growth and the indexing of the exclusion between deaths). The federal exclusion is $15,000,000 for 2026 deaths, so neither case owes federal tax. Drafting is for an estate-planning attorney; our ILIT and SLAT guide covers the federal side.

Return, interest and penalties

On the $424,000 tax of the $12,000,000 resident estate paid 12 months late, the 1% monthly penalty is $50,880 and interest at 9% compounded monthly is about $39,774 (our arithmetic). You file and pay on the Maine Tax Portal, and the FAQ says no account is needed.

Dates to watch

• The 2027 exclusion. Section 4119 says the assessor sets it on or about September 15, 2026. The Maine Revenue Services page we read on October 21, 2026 listed 2026 as the latest year. Check the page before relying on any 2027 estimate; on the 2018 to 2026 record the number tends to rise by $70,000 to $400,000 a year (our arithmetic).
• The 2027 interest rate is marked as not yet determined in the instructions.
• The nine-month date runs from each death. A death on October 22, 2026 puts the return and tax due July 22, 2027.
• The statute text can change with a bill. We read the sections as published on the Legislature's site with a data extraction date of October 5, 2026.

What a reader can do with this

What the documents let you check before talking to anyone:

• Build the number from Form 706ME. Take the federal taxable estate (line 3a of the federal Form 706, or a pro forma), add taxable gifts of the last year, and compare the result with $7,160,000.
• Sort every building and account by location. A Maine resident's tax is cut by real property elsewhere; a nonresident's is only on Maine real and tangible property but at the rate of the whole estate.
• Check how each Maine property is held. A camp in an LLC with no operating business is treated as owned personally; ask the attorney what evidence of a business exists.
• Look at the last twelve months of gifts. A large taxable gift made within one year of death is added back.
• Plan the cash. The tax and interest run from nine months after death, and Maine can place a lien on the property until a discharge is recorded.

The decision, and who makes it. An estate-planning attorney drafts any bypass trust, Maine-only QTIP election or entity changes, and a CPA prepares Form 706ME and the federal return. A financial adviser's part is how the tax would be paid from a mostly illiquid estate. This page is not a recommendation to change a plan.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 21 and 22, 2026: Maine Revised Statutes title 36, sections 4102, 4103, 4104, 4105, 4106, 4107, 4108, 4109, 4112 and 4119 (legislature.maine.gov, data extracted October 5, 2026); Maine Revenue Services, Estate Tax (706ME) page with the rate tables for 2013 to 2026, Estate Tax FAQ (revised May 6, 2026), Rule 603 (Maine Estate Tax After 2012, effective April 27, 2024) and the 2026 Form 706ME (revised August 2026) with its instructions. We did not read the Maine Revenue Services guidance document on estates after 2012 or the Chained CPI series, so the 2018 to 2026 multiples are our arithmetic from the published exclusions. The tax grid, the examples, the interest figure and the multiples are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.