Maine Legislature, Session 124, LD 1214
Committee: Taxation
Sponsors: TUTTLE, CROCKETT, PILON, VALENTINO

Legislative Document 
No. 1214 
H.P.839 
House of Representatives, March 26,2009 
An ACt To Amend the Laws Regarding the Taxation of Private and 
Public Pensions 
Reference to the Committee on Taxation suggested and ordered printed. 
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MILLICENT M. MacFARLAND . 
Clerk' 
Presented by Representative TUTTLE of Sanford .. 
Cosponsored by Representatives: CROCKETT of Augusta, PILON of Saco, VALENTINO of 
Saco . 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec.!. 36 MRSA §S122, sub-§2, ~, as amended by PL 2005, c. 218, §53, is 
repealed and the following enacted in its place: 
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 by the total amount of the individual's social 
security benefits and railroad retirement benefits paid by the United States as 
provided in this subparagraph, but not less than $0. 
(a) For tax years beginning on or after January 1, 2009 but ending December 
30, 2009, $4,800 of the individual's social security benefits and railroad 
retirement benefits paid by the United States; 
(b) For tax years beginning on or after January 1, 2010 but ending December 
30, 2010, $3,600 of the individual's social security benefits and railroad 
retirement benefits paid by the United States; 
(c ) For tax years beginning on or after January 1, 2011 but ending December 
30, 2011, $2,400 of the individual's social security benefits and railroad 
retirement benefits paid by the United States; 
. 
(d) For tax years beginning on or after January 1, 2012 but ending December 
30, 2012, $1,200 of the individual's social security benefits and railroad 
retirement benefits paid by the United States; and 
(e) For tax years beginning on or afterJanuary 1, 2013 there is no reduction. 
The reduction does not apply to benefits paid under a military retirement plan; 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, 
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 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(0 of the· Code. 
Pension benefits under an employee retirement plan do not include distributions that 
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are subject to the tax imposed by the Code, Section 72(t). "Military retirement plan" 
means beriefits received as a result of service in the active or reserve components of 
the Army, Navy, Air Force, Marines or Coast Guard; 
Sec. 2. Application. TIns Act applies to tax years beginning on or after January 1, 
2009. 
SUMMARY 
Under current law, in calculating a resident's taxable income, the federal adjusted 
gross income of a resident who receives a pension may be reduced byan amount that 
equals $6,000 reduced by the amount of the resident's social security or railroad benefits. 
This bill phases out that reduction for social security and railroad benefits over a 5-
year period, begirining with the 2009 tax year.