The Maryland tax booklet is quite clear that as long as your pension is included in your federal return it can be used as a pension exclusion on your Maryland state return. So by example you have a Maryland state pension that paid you $10,000 in 2019 and your 1099-R has $20,000 in Pick-Up Contributions. Just because your $10,000 pension is exempt from state tax it is still taxable on your federal return and therefore eligible as pension exclusion. Why would anyone think differently?
