Does Maine tax pensions and retirement income?
Taxed, with a retirement exclusion
Partly. For 2025 Maine lets each person deduct up to $48,216 of eligible pension income, but that cap is reduced by any Social Security and railroad retirement benefits received. Military retirement pay has its own deduction.
In the state's own words
Copied word for word from the official document linked below each quote:
“In addition, you and your spouse (if married) may each deduct up to $48,216 of other eligible pension income* that is included in your federal adjusted gross income.”
“The $48,216 cap must be reduced by any social security and railroad retirement benefits received, whether taxable or not.”
And Social Security?
No. On Maine Schedule 1S, the Social Security that is taxed on your federal return is a subtraction from income. The Maine Social Security page quotes the rule.
Federal tax still applies
Whatever Maine does, pensions, annuities and traditional IRA or 401(k) withdrawals are generally taxable on your federal return. See the federal tax brackets and, if you are 73 or older, the required minimum distribution calculator.
State rules change, and the details (age limits, income limits, which plans qualify) matter. Check with the Maine Revenue Services before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- 2025 Form 1040ME InstructionsMaine Revenue Services. Read on November 12, 2026.