An Act To Increase the Tax Exemption for Pensions
Maine Legislature, Session 127, LD 0625
Committee: Taxation
Sponsors: BAKER, MAKER, BURNS, COLLINS, CYRWAY, KATZ, SAVIELLO, VOLK, WHITTEMORE, WOODSOME
Amends: 36 MRSA §5122

Legislative Document 
No. 625 
S.P. 218 
In Senate, March 3, 2015 
An Act To Increase the Tax Exemption for Pensions 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Presented by Senator BAKER of Sagadahoc. 
Cosponsored by Representative MAKER of Calais and 
Senators: BURNS of Washington, COLLINS of York, CYRWAY of Kennebec, KATZ of 
Kennebec, SAVIELLO of Franklin, VOLK of Cumberland, WHITTEMORE of Somerset, 
WOODSOME of York. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §5122, sub-§2, ¶M-1, as amended by PL 2013, c. 546, §13, is 
further amended to read: 
M-1.  For tax years beginning on or after January 1, 2014, for each individual who is 
a primary recipient of retirement plan benefits under an employee retirement plan or 
an individual retirement account, an amount that is the lesser of the aggregate of 
retirement plan benefits under employee retirement plans or individual retirement 
accounts included in the individual's federal adjusted gross income and the pension 
deduction amount 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 social security benefits and railroad retirement benefits reduction does not 
apply to benefits paid under a military retirement plan. 
For purposes of this paragraph, the following terms have the following meanings. 
(1)  "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.   
(2)  "Individual retirement account" means an individual retirement account 
under Section 408 of the Code, a Roth IRA under Section 408A of the Code, a 
simplified employee pension under Section 408(k) of the Code or a simple 
retirement account for employees under Section 408(p) of the Code. 
(3)  "Military retirement plan" means retirement plan benefits received as a result 
of service in the active or reserve components of the Army, Navy, Air Force, 
Marines or Coast Guard. 
(4)  "Pension deduction amount" means $10,000 for tax years beginning on or 
after January 1, in 2014 and $15,000 for tax years beginning on or after January 
1, 2015. 
(5)  "Primary recipient" means the individual upon whose earnings or 
contributions the retirement plan benefits are based or the surviving spouse of 
that individual. 
(6)  "Retirement plan benefits" means employee retirement plan benefits, except 
pick-up contributions for which a subtraction is allowed under paragraph E, 
reported as pension or annuity income for federal income tax purposes and 
individual retirement account benefits reported as individual retirement account 
distributions for federal income tax purposes.  "Retirement plan benefits" does 
not include distributions that are subject to the tax imposed by the Code, Section 
72(t); 
SUMMARY 
This bill increases from $10,000 to $15,000 the maximum amount of pension benefits 
that may be excluded from taxable income for Maine income tax purposes. The increased 
deduction applies to tax years beginning on or after January 1, 2015.