An Act To Amend the Laws Governing the Deduction of Pension and Retirement Benefits from State Income Tax
Maine Legislature, Session 121, LD 0403
Committee: Taxation
Sponsors: GAGNON, SIMPSON, HATCH, MAYO, STANLEY, WOODCOCK, CANAVAN, LERMAN, MARRACHE, PATRICK
Amends: 36 MRSA §5122

Legislative Document 
No. 403 
S.P.140 
In Senate, January 30, 2003 
An Act To Amend the Laws Governing the Deduction of Pension 
and Retirement Benefits from State Income Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator GAGNON of Kennebec. 
Cosponsored by Representative SIMPSON of Auburn and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: HATCH of Somerset, MAYO of Sagadahoc, STANLEY of Penobscot, 
WOODCOCK of Franklin, Representatives: CANAVAN of Waterville, LERMAN of Augusta, 
MARRACHE of Waterville, PATRICK of Rumford. 
Printed on recyc led paper 
396, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §5122, sub-§2, 1fM, as amended by PL 2001, c. 
§34 and affected by §50, is further amended to read: 
M. 
An amount, for each primary recipient of benefits under 
an employee retirement plan, that is the lesser of: 
(1) 
SiH--t~-Ge-l-l-aF-&--!"~-e4--b-y-t.ae--t-o-t.-a-l--aHleb\BE 
e~-t.ae-~~ma-!"~-~~~~~~~~~l-~~~~y-&eae~1~&-aBe 
~ai!~eae-£et.i£emeRt.-~~~~-~~~-~h&-Ya1~ee-~tate6T 
ab\t-Ret.-~~-t~-$~r---~Be Except that this reduction 
does 
not 
apply 
to 
benefits paid 
under 
a 
military 
retirement planf-e'li, the following amounts reduced by 
the total 
amount of 
the primary recipient's social 
security benefits and railroad retirement benefits paid 
by the United States, but not less than $0, for each 
tax year beginning in the following years: 
( a) 
2004, $8,000; 
(b) 
2005, $9,000; 
(d 
2006, $10,000; 
( d) 
2007, $11, 000; 
( e) 
2008, $12,000; 
(f) 
2009, $13,000; 
(g) 
2010, $14,000; 
( h) 
2011, $15,000; 
(i) 
2012, $16,000; 
( j ) 
2013 , $17,000; and 
(k} 
2014 and after, /li2Q,000; and 
(2) 
The aggregate of benefits received by the primary 
recipient under employee retirement plans and included 
in federal adjusted gross income. 
For purposes of this paragraph, "employee retirement plan" 
means a state, federal or military retirement plan or any 
other retirement benefit plan established and maintained by 
an employer for the benefit of its employees under Section 
401( a), 
Section 
or 
Section 
(b) 
of 
the 
Code. 
"Employee retirement plan" does not include an individual 
retirement account under Section 408 of the Code, a Roth IRA 
under 
Section 
408A 
of 
the 
Code, 
a 
rollover 
individual 
retirement 
account, 
a 
simplified 
employee 
pension 
under 
Section 
408(k) 
of 
the 
Code 
or 
an 
ineligible 
deferred 
compensation plan under Section 457 (f) of the Code. 
For 
purposes of this paragraph, "military retirement plan" means 
benefits received as a result of service in the active or 
reserve components of the Army, Navy, Air Force, Marines or 
Coast 
Guard. 
For 
purposes 
of 
this 
paragraph, 
"primary 
recipient" means the pension recipient upon whose earnings 
the pension is based or the surviving spouse of such a 
person; 
Sec. 2. Application. 
That section of this Act that amends the 
Maine Revised Statutes, Title 36, 
section 5122, 
subsection 2, 
paragraph M applies to tax years beginning on or after January 1, 
2004. 
SUMMARY 
Current law provides a deduction from the state income tax 
for the first $6,000 of income from certain public, private and 
military pensions. 
This 
bill 
increases 
the 
January 1, 2004 and $1,000 each 
of the deduction is $17,000 in 
deduction increases to $20,000. 
deduction 
to 
$8,000 
beginning 
subsequent year until the amount 
2013. 
In 2014 and after the