ME HoH elderly 2025 25Kpwages 75page 1depx 5age1

[feenberg]

See http://taxsim.nber.org/out2psl/951

PE finds additional unspecified refundable tax credits.

[PavelMakarchuk]

Tracing the actual Maine Child Care Credit Worksheet (page 2 of Schedule A form, verbatim):

• Line 4: Total Maine credit = 25% × federal CDCC for regular care (Column A); 50% × federal CDCC for Step 4 / Star 5 quality-rated care (Column B)
• Line 5 (Refundable portion): min(line 4, $500) — refundable up to $500 → enter on Schedule A Line 2
• Line 6 (Non-refundable portion): line 4 − line 5 → enter on Schedule A Line 10

So the credit's first $500 is refundable for both regular AND Step 4/Star 5 care — the Step 4 distinction only doubles the credit (25% → 50%), not the refundability.

For this filer (single HoH, $25K wages, AGI $25K, 1 dep age 5, $3,500 regular childcare expenses, no Step 4/Star 5):

• Federal CDCC (Schedule 3 Line 2): ~$900 (rate phases from 35% to 20% as AGI rises above $15K → ~30% at AGI $25K × $3K expense cap)
• Line 3 Col A: $900 × 25% = $225
• Line 4: $225
• Line 5: min($225, $500) = $225 refundable → Schedule A Line 2 → 1040ME Line 25c

So per the statute and worksheet, the credit IS refundable here (under $500 cap), and ~$225 belongs on Schedule A Line 1 (the Section 1 Refundable Credits list).

TaxAct's PDF leaves Schedule A Line 1 (Section 1 Child Care Credit) blank — appears to miss the credit entirely. PE applies ~$300 there (slightly higher than my hand-calc $225, likely due to PE's federal CDCC computation having a different earned-income-test or rate-phaseout treatment).

Engine summary against the statute:

• PE refund $2,146 — applies ME EITC + DEC + STFC + ~$300 refundable Child Care Credit per § 5218 + worksheet. Statute-correct on structure (Child Care Credit IS refundable); PE's $300 amount may be ~$75 over my hand-calc $225 due to federal-CDCC calc differences — worth verifying.
• TaxAct refund $1,840 — applies EITC + DEC + STFC but leaves Schedule A Line 1 blank despite the worksheet showing the credit IS available and refundable for this filer.
• TAXSIM-35 refund $1,536 — separate gap, hasn't yet been traced.

Leaving open: PE is structurally statute-correct (credit IS refundable up to $500); but PE's specific $300 amount needs verification against the federal CDCC calculation for this filer. TaxAct's missing Line 1 entry appears to be a TaxAct gap.