The maximum allowable pension exclusion of $36,200 per taxpayer on your Maryland return includes your social security benefits. Because your social security benefits exceed $36,200, there won't be an additional subtraction for your pension.
Regarding the difference in social security benefits used on the Pension Exclusion Computation Worksheet and the amount subtracted on Line 11 of Form 502: The Maryland Pension Exclusion Worksheet uses the full amount of your social security benefits to calculate the pension exclusion because all of your benefits are non-taxable on your Maryland return. In your case, 85% of your social security benefits were taxable on your federal return, so that amount is subtracted on Line 11 of Form 502. In other words, the full amount of your social security benefits are not subtracted on Line 11 because only 85% of the benefits were included in your federal adjusted gross income (Line 1 of MD Form 502).
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