An Act To IO Eliminate the State Income Tax for Maine Public Employees Retirement System Pensions
Maine Legislature, Session 128, LD 0513
Committee Amendment CA_A_S118 (Senate)
Amends: 36 MRSA §5122

COMMITTEE AMENDMENT "A" to S.P. 174, L.D. 513, Bill, "An Act To 
IO 
Eliminate the State Income Tax for Maine Public Employees Retirement System 
Pensions" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Provide Equity in the State Income Tax Deduction for Maine Public 
Employees Retirement System Pensions' 
. 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 36 MRSA §5122, sub-§2, ~-2, as amended by PL 2015, c. 382, §2 and 
c. 390, §8, is fmiher amended to read: 
M-2. For tax years beginning on or after January 1, 2016: 
(1) For each individual who is a primary recipient of retirement plan benefits, the 
reduction is the sum of: 
(a) Excluding military retirement plan benefits, an amount that is the lesser 
of 
(i) The aggregate of retirement plan benefits under employee retirement 
plans or individual retirement accounts included in the individual's 
federal adjusted gross income; and 
(ii) 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; and 
0 
(b) An amount equal to the aggregate of retirement benefits under military 
retirement plans included in the individual's federal adjusted gross income; 
and 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A "to S.P. 174, L.D. 513 
l 
(2) For purposes of this paragraph, the following terms have the following 
meanings. 
(a) "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. 
(b) "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. 
(c) "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. 
(d) "Pension deduction amount" means $10,000, except that, for tax years 
beginning on or after January 1, 201 7, for persons receiving uncovered civil 
service retirement plan benefits, "pension deduction amount" means the 
maximum annual benefit that an individual retiring at age 66 during January 
of the tax year may receive under the federal Social Security Act. 
( e) 
"Primary recipient" means the individual upon whose earnings or 
contributions the retirement plan benefits are based or the surviving spouse of 
that individual. 
(f) 
"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(tk 
(g) 
"Uncovered civil service retirement plan benefits" means employee 
retirement plan benefits received under Title 5, Part 20 or under a similar 
retirement plan of another state government, a local government or the 
Federal Government, as a result of service that is considered noncovered 
service under 42 United States Code, Section 415(a)(7)(A)(ii);' 
SUMMARY 
This amendment, which is the majority report, provides that the maximum income 
tax deduction for a retired individual receiving retirement benefits under a retirement plan 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT"A "to S.P. 174, L.D. 513 
based on employment compensation for which contributions are not made to the federal 
social security system is equal to the maximum annual social security benefit that may be 
received by a person retiring at 66 years of age in January of the applicable year. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/05/17 feac.. 
LD 513 
LR 998(02) 
An Act To Eliminate the State Income Tax for Maine Public Employees Retirement System Pensions 
Fiscal Note for Bill as Amended by Committee Amendment "p/' ( S -l \~ 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2017-18 
$0 
$0 
$0 
FY 2018-19 
$18,235,838 
($18,235,838) 
($563,488) 
Projections 
FY 2019-20 
$18, 728,204 
($18, 728,204) 
($584,656) 
Projections 
FY 2020-21 
$19,233,773 
($19,233, 773) 
($594,960) 
This legislation makes changes to pension deductions for individuals receiving retirement benefits under a plan based 
on compensation for which contributions are not made to social security. It would result in a reduction in General 
Fund revenue of $18,235,838 in fiscal year2018-19 and a reduction in Local Government Fund revenue of$372,423 
in fiscal year 201 8-19. It would also reduce revenue to the Fund to Advance Public Kindergarten to Grade 12 
Education by $191,065 in fiscal year 2018-19. 
LR0998(02) - Fiscal Note - Page I of I