An Act To Allow Disabled Retired State Employees To Be Eligible for a Pension Deduction under Maine Income Tax Law
Maine Legislature, Session 122, LD 1158
Committee: Taxation
Sponsors: DUDLEY, STRIMLING, DAVIS, DUPLESSIE, JACKSON, SMITH, TUTTLE, BARTLETT, BRENNAN, MITCHELL

Legislative Document 
No.US8 
H.P.801 
House of Representatives, March 8,2005 
An Act To Allow Disabled Retired State Employees To Be Eligible 
for a Pension Deduction under Maine Income Tax Law 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative DUDLEY of Portland. 
Cosponsored by Senator STRIMLING of Cumberland and 
'17/~ /J7.1lbc~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: DAVIS of Falmouth, DUPLESSIE of Westbrook, JACKSON of Fort Kent, 
SMITH of Van Buren, TUTTLE of Sanford, Senators: BARTLETT of Cumberland, 
BRENNAN of Cumberland, MITCHELL of Kennebec. 
Printed 011 recycled paper 
Be it enacted by the People of the State of Maine as follows: 
391, 
Sec. 1. 36 MRSA §SI22~ sub-§2. 'M. as amended by PL 2003, c. 
§5, is further amended to read: 
M. 
For 
each individual who 
is 
a 
primary recipient of 
benefits under an employee retirement plan or disability 
retirement plan, an amount that is the lesser of: 
(1) 
Six thousand dollars reduced by the total amount 
of 
the 
individual's 
social 
security 
benefits 
and 
railroad retirement benefits paid by the United States, 
but not less than $0. 
The reduction does not apply to 
benefits paid under a military retirement plan; or 
(2 ) 
aggregate of benefits received by the primary 
recipient 
as 
disability 
income 
or 
under 
employee 
retirement 
plans 
or 
disability 
retirement 
plans 
included in the individual's federal 
adjusted gross 
The 
income. 
For purposes of this paragraph, the following terms have the 
following 
meanings. 
"Primary 
recipient" 
means 
the 
individual upon whose earnings the employee retirement plan 
benefits or disabilit~tirem~nt plan benefits are based or 
the 
survl.vl.ng 
spouse 
of 
that 
individual. 
"Disability 
retirement plan" means a plan providing disability benefits 
__ received-puk'su.;mt to Title 5, 
chapter 423, 
subchapter 5, 
article 3 or 3-A. 
"Employee-r~t{-reriie.~t ~~au 
lII~ttns 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 the Code, Section 401(a), 
Section 403 or Section 457(b), 
except that distributions 
made pursuant to a section 457(b) plan are not eligible for 
the deduction provided by this paragraph if they are made 
prior 
to 
age 
and 
are 
not 
part 
of 
a 
series 
of 
substantially equal periodic payments made for the life of 
the primary recipient or the joint lives of the primary 
recipient 
and 
that 
recipient's 
designated 
beneficiary. 
"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 
(f) 
of 
the 
Code. 
Benefits under an employee retirement plan do not include 
distributions that are subject to the tax imposed by the 
Code, 
Section 
72(t). 
"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: 
SUMMARY 
Current law provides an exemption for the first $6,000 of 
retirement 
income 
received pursuant 
to 
a 
state, 
federal 
or 
military retirement plan. 
This bill provides the same exemption 
for 
the first $6,000 
of 
income 
received under 
a 
disability 
retirement plan policy administered 
by 
the 
State 
for 
state 
employees and teachers.