Maine’s student loan tax credit delivers up to $2,500 — but only if you know it exists

Mainers with student loans could receive up to $2,500 this tax season — but only if they know the credit exists. The state’s Student Loan Repayment Tax Credit, refundable and available annually, applies to both principal and interest payments, directly reducing what borrowers owe on their Maine income taxes. To qualify, taxpayers must have earned an associate, bachelor’s, or graduate degree after 2007, be making eligible loan payments, file a Maine individual income tax return, and earn at least $13,712. Because the credit is refundable, it can generate a payment to the filer even if no tax is owed. Maine first introduced educational tax relief in 2008, but this expanded version opens eligibility to more graduates who live and work in the state. The credit is capped at $25,000 over a lifetime. According to the governor’s office, benefits to Maine student loan borrowers under the program nearly doubled from 2022 to 2024.