Sec. 1. 36 MRSA §5219-W is enacted to read:

§5219-W.__Retirement savings credit

For tax years beginning on or after January 1, 2003 and before January 1, 2007, a taxpayer is allowed a credit against the tax imposed by this Part with respect to a qualified retirement savings contribution that qualifies for a credit under Section 25B of the Code.__The credit is equal to the applicable percentage allowed under Section 25B of the Code applied to up to $500 of the qualified contribution.__A person who has received a credit under this section is not eligible for a credit under this section in any subsequent year.__The credit allowed under this section may not reduce the tax otherwise due under this Part to less than zero.

SUMMARY

This bill provides a one-time income tax credit for certain federally qualified retirement savings contributions. The credit ranges from 10% to 50% of up to $500 of contributions that qualify for a federal credit. The percentage allowed is the same as that allowed under the federal credit and decreases as the taxpayer's federal adjusted gross income increases. The credit expires after 4 years.