Maine State Tax owed?

[flteng56]

Hi,

Both my wife and I are retired with no income outside of what is listed below and are full time residents of Maine. We receive the following income:

Me: (1) Military retirement (2) Social Security

Wife: (1) Florida Retirement System monthly pension (2) Social Security (3) Talcott Resolution Life Insurance Company - Monthly pension

If I am not mistaken the following are not taxable in the state of Maine: (1) Social Security (2) Military Retirement (3) Florida Retirement System monthly pension.

That would leave the "Talcott Resolution" pension payment as taxable by the state. It was for $8098.98

Doing State tax via Turbo Tax Deluxe It came up we owed $351.00 to the State Of Maine.

I may be looking at this to simply but should we be owing State Taxes?

Thank You,

Frank

[DavidS127 · Accepted solution]

Your military retirement is fully exempt from Maine state income tax.

For the other pension income, you get a maximum exclusion of $10,000 each. BUT, that $10,000 maximum exclusion for each must be reduced by the Social Security benefits that each of you receive, even if the Social Security is not taxed. 

So, you are likely being taxed on some portion of your non-military pension.

See the Worksheet for Pension Income Deduction in the Maine Form 1040ME instructions for more details.

[flteng56]

Tank you DavidS127 for your prompt reply.

[mlkeith]

I have lived and worked in Maine all of 2019, and my spouse has lived and worked in Texas all of 2019. Why is his income being considered for Maine State Income Tax?

[DaveF1006]

Since you are filing jointly, Maine will declare all of your taxable income as taxable along with the itemized deduction for filing jointly and two personal exemptions.  If your wife lived in a state that required income taxes, she would have received a credit for her taxes paid in that state. 

Now in your Maine tax return, you do have an option to Married Filing Separate. You can change your filing status as you go through the Maine questions. Try that to see if that will give you a better result or just stick with Married Filing jointly. The results may surprise you.

[mlkeith]

Thank you for your help.  However, since my spouse lives and works in Texas and has no state income tax, and since Turbo Tax was calling it at @$2250 due to them, I decided to keep on researching. As it turns out, because I live by myself in Maine, I can file the Maine Income Tax as Single which worked extremely well for me. If you happen to find another person with the same problem living in Maine, please pass this info on to them. Again, thank you for your response.

[DaveF1006]

i did mention the fact you can file separately from your spouse in your Maine return. That is an option opened to you.