An Act To Ensure the Income Tax for Pensions Is Applied Fairly by Eliminating Reductions of Social Security and Railroad Benefits
Maine Legislature, Session 123, LD 0802
Committee: Taxation
Sponsors: STRIMLING
Amends: 36 MRSA §5122

Legislative Document 
No. 802 
S.P.251 
February 16,2007 
An Act To Ensure the Income Tax for Pensions Is Applied Fairly by 
Eliminating Reductions of Social Security and Railroad Benefits 
Received by the Secretary of the Senate on February 15,2007. Referred to the Committee 
on Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 218. 
Presented by Senator STRIMLING of Cumberland. 
Printed on recycled paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §5122, sub-§2, ~, as amended by PL 2005, c. 218, §53, is 
further amended to read: 
M. 
For each individual who is a primary recipient of pension benefits under an 
employee retirement plan, an amount that is the lesser of: 
(1) Six thousand dollars reduced ay the total amouAt of the iAdividual's social 
security aeAefits and railroad retiremeAt aeAefits paid ay the UAited States, aut 
AOt less t1'lan $0. The reductioA does AOt af'f'ly to aeAefits f'aid uAder a military 
retiremeAt f'lan; or 
(2) The aggregate of pension benefits under employee retirement plans included 
in the individual's federal adjusted gross 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 are based or the surviving spouse of that individual. 
"Pension benefits" means employee retirement plan benefits reported as pension or 
annuity income for federal income tax purposes. "Employee retirement plan" means 
a state, or 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 40l(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 55 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 457(f) of the Code. 
Pension benefits under an employee retirement plan do not include distributions that 
are subject to the tax imposed by the Code, Section 72(t). "Military retiremeAt plaA" 
meaAS aeAefits recei'/ed as a result of service iA the active or reserve compOAeAts of 
the Arm)', Navy, Air Force, MariAes or Coast Guard; 
Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 
2007. 
SUMMARY 
Under current law, in calculating a Maine resident's taxable income, the federal 
adjusted gross income of a resident who receives a pension may be reduced by an amount 
that equals $6,000 reduced by the amount of the resident's social security or railroad 
benefits. 
This bill eliminates the reduction for social security and railroad benefits. 
I 
This bill also eliminates references to "military retirement plan" since benefits 
received under such a plan are no longer an exception to the allowed reduction.