Important Information About the Maine Pension Income Deduction and Your MainePERS Benefit

Individuals who receive MainePERS benefits and file their taxes in the State of Maine may qualify for a pension income deduction for all or part of their MainePERS benefit. The amount of the pension income deduction available is based on the maximum annual Social Security benefit for someone retiring that year at full retirement age reduced by any Social Security or railroad retirement benefits received.

For individual taxpayers, the maximum deduction for tax year 2025 is $48,216. A new law phases out this deduction starting at adjusted gross incomes greater than $125,000 for single tax return filers, $187,000 for head-of-household filers, and $250,000 for joint filers. This phase out applies for tax year 2025. Additional information is available at: www.mainepers.org/retirement/benefit-payment-and-tax-information/, see Question 11.

To qualify for this deduction, the pension income must be earned by the person receiving the benefit, with the exception of a spouse receiving survivor benefits under an eligible pension plan. A spouse who receives a portion of their spouse’s benefit while both are living cannot take a pension income deduction for that amount. Income received by a former spouse receiving a portion of a member’s benefit under a qualified domestic relations order does not qualify for this deduction.

Disability income received from MainePERS that is reported as wages on your federal income tax return does not qualify for this deduction.

If you have a tax preparer or advisor, they should be able to address any questions about the Maine pension income deduction. Questions also may be directed to Maine Revenue Services at 207-626-8475.

Please note: A new Form W-4ME must be filed with MainePERS if you would like to change your state withholding. This form may be found at www.mainepers.org/forms/retiree-forms/.