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dhjolly49
New Member

Am working on my Maine state tax return, trying to determine my pension income deduction. What constitutes eligible pension income?

Is eligible pension income just the total pension income received?

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DanielV01
Expert Alumni

Am working on my Maine state tax return, trying to determine my pension income deduction. What constitutes eligible pension income?

Eligible pension income in Maine includes the following:

Deductible pension income, other than military retirement pay, includes state and federal pension benefits and retirement benefits received from plans established and maintained by an employer for the benefit of its employees such as: qualified pension plans, including qualified SIMPLE plans; employee annuities; and eligible deferred compensation plans from state and local governments or tax exempt organizations. Deductible pension income also includes benefits received from individual retirement accounts, including ROTH and SIMPLE IRAs, and simplified employee pension plans.

(Taken from the following Maine link: What is the Pension Benefits Income Deduction?)

However, any retirement income deduction is reduced by taxable and non-taxable Social Security benefits you are receiving.  

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3 Replies
DanielV01
Expert Alumni

Am working on my Maine state tax return, trying to determine my pension income deduction. What constitutes eligible pension income?

Eligible pension income in Maine includes the following:

Deductible pension income, other than military retirement pay, includes state and federal pension benefits and retirement benefits received from plans established and maintained by an employer for the benefit of its employees such as: qualified pension plans, including qualified SIMPLE plans; employee annuities; and eligible deferred compensation plans from state and local governments or tax exempt organizations. Deductible pension income also includes benefits received from individual retirement accounts, including ROTH and SIMPLE IRAs, and simplified employee pension plans.

(Taken from the following Maine link: What is the Pension Benefits Income Deduction?)

However, any retirement income deduction is reduced by taxable and non-taxable Social Security benefits you are receiving.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
bnoll411
Level 2

Am working on my Maine state tax return, trying to determine my pension income deduction. What constitutes eligible pension income?

I am very disappointed TurboTax doesn’t ask the right questions such that this info would be filled in automatically.  If I need to read the Maine tax code, maybe I don't need TurboTax.
jxinleblanc
Level 2

Am working on my Maine state tax return, trying to determine my pension income deduction. What constitutes eligible pension income?

I found the following  from Maine Revenue Services website very helpful (Answer to Q7)

 

https://www.maine.gov/revenue/faq/individual-income-tax#faq1040_7 

7. What is the Pension Benefits Income Deduction?

For tax years beginning on or after January 1, 2016, the benefits received under a military retirement plan, including survivor benefits, are fully exempt from Maine income tax.

In addition, you and your spouse may each deduct up to $10,000 of pension income that is included in federal adjusted gross income. The $10,000 cap must be reduced by all taxable and nontaxable social security and railroad retirement benefits received.

Deductible pension income, other than military retirement pay, includes state and federal pension benefits and retirement benefits received from plans established and maintained by an employer for the benefit of its employees such as: qualified pension plans, including qualified SIMPLE plans; employee annuities; and eligible deferred compensation plans from state and local governments or tax exempt organizations. Deductible pension income also includes benefits received from individual retirement accounts, including ROTH and SIMPLE IRAs, and simplified employee pension plans.

Married taxpayers who elect to file a joint return may have a total deduction of up to $20,000, although each spouse's deduction is computed separately.

You must complete the Worksheet for Pension Income Deduction available on the Forms page, and submit the worksheet with your income tax return to claim a Pension Income Deduction.

Revised: February 4, 2021

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