An Act To Exempt Military Pensions and Survivor Benefits from Maine Income Tax
Maine Legislature, Session 127, LD 0280
Committee: Taxation
Sponsors: GINZLER, CAMPBELL, HAMPER, DILLINGHAM, ESPLING, LYFORD, SIROCKI, VACHON, VEROW, WINSOR, BRAKEY
Amends: 36 MRSA §5122

Legislative Document 
No. 280 
H.P. 198 
House of Representatives, February 5, 2015 
An Act To Exempt Military Pensions and Survivor Benefits from 
Maine Income Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
ROBERT B. HUNT 
Clerk 
Presented by Representative GINZLER of Bridgton. 
Cosponsored by Representative CAMPBELL of Orrington, Senator HAMPER of Oxford and 
Representatives: DILLINGHAM of Oxford, ESPLING of New Gloucester, LYFORD of 
Eddington, SIROCKI of Scarborough, VACHON of Scarborough, VEROW of Brewer, 
WINSOR of Norway, Senator: BRAKEY of Androscoggin. 
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, 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 401(a), Section 
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 a military retirement plan or survivor benefits 
under such a plan. 
(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, 2014. 
(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); 
Sec. 2.  36 MRSA §5122, sub-§2, ¶M-2 is enacted to read: 
M-2.  For tax years beginning on or after January 1, 2015, benefits received under a 
military retirement plan, including survivor benefits.  For the purposes of this 
paragraph, "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; 
Sec. 3.  Application.  This Act applies to tax years beginning on or after January 1, 
2015. 
SUMMARY 
This bill provides an income tax exemption for benefits received under a military 
retirement plan, including survivor benefits.