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Home/Credit & Lending/STUDENT LOAN REPAYMENT POLICY · CRYPTO IRS RULING

Maine Tax Filers Face State Taxes on Tips and Overtime Despite Federal Deductions

LW

Leona Winters

student loan repayment policy · Apr 13, 2026

Maine Tax Filers Face State Taxes on Tips and Overtime Despite Federal Deductions

Source: DojiDoji Data Terminal

Maine residents owe state taxes on wages earned from tips and overtime. The state has not adopted the "no tax on tips" and "no tax on overtime" programs enacted federally under the One Big Beautiful Bill Act.

Related Brief4h ago
tax policy

Taxpayer perception diverges from $130 billion in income tax cuts

Forty percent of adults believe their taxes are much or somewhat higher, while 10% believe they are lower. This perception exists despite the One Big Beautiful Bill Act cutting individual income taxes by almost $130 billion and increasing the average tax refund by 11%. The act implemented seven major cuts last year. It increased the maximum child tax credit by $200 and the standard deduction by $750 for single filers and $1,500 for joint filers. Taxpayers earning under $500,000 saw the state and local tax deduction cap increase to $40,000. The law created a $6,000 additional deduction for seniors phasing out above $75,000 for individuals and $150,000 for joint filers, and a $10,000 auto loan interest deduction phasing out above $100,000 for individuals and $200,000 for joint filers. It also established deductions for up to $25,000 in tip income and up to $12,500 in overtime income for individuals, both phasing out above $150,000 for individuals and $300,000 for joint filers. Withholding tables are adjusting this year to provide these cuts through higher take-home pay. Ten percent of adults believe their taxes are somewhat or much lower.

Federal tax law now allows a deduction for qualified tips, capped at $2,500 annually, for taxpayers in industries where tipping is common, such as housekeeping, food service, and bartending. This deduction phases out for individuals with a modified adjusted gross income over $150,000, or $300,000 for joint filers. To claim the federal break, filers must use Schedule 1-A, which also covers car loan, senior, and state and local tax deductions. Maine residents remain eligible for the federal credit while paying state taxes on those same wages.

Related Brief1d ago
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Louisiana Tax Refunds Rise 11% Following Working Families Tax Cut

The average tax refund in Louisiana is up 11% from last year. This increase is the result of the Working Families Tax Cut, which permanently increased the standard deduction to $31,500 for families and $15,750 for individuals. The law also raised the Child Tax Credit to $2,200 per child and introduced a deduction for seniors 65 or older of up to $6,000 for those filing individually and $12,000 for those filing jointly. Additionally, the law eliminated taxes on tips and overtime pay for qualifying workers.

student loan repayment policycrypto IRS ruling

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