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

Individuals who receive MainePERS benefits and file their taxes with 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 varies depending on the tax year and will be reduced by social security or railroad retirement benefits you may receive.

The maximum deduction for individual taxpayers for tax year 2023 is $30,000. Under a recent Maine law change, the maximum deduction for tax years 2024 and beyond will be based on the maximum annual Social Security benefit available for someone retiring that year at full retirement age. For tax year 2024, that amount will be $45,864.

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.