Is my military income taxable to Maine?

According to the Maine Filing Instructions:

If you are a resident of Maine stationed inside of Maine, your active duty military pay is subject to Maine tax.

If you are a resident of Maine stationed outside of Maine, you can deduct your active duty military pay from your resident return.  

To exclude the active duty military pay received by a Maine resident while not stationed in Maine, perform the following steps in the program:

1. State Section
2. Maine Resident Return
3. Subtractions From Income
4. Non-Maine active duty military pay received by a Maine resident
5. Enter the military pay received while stationed out of state
6. Save

If you are a nonresident of Maine Stationed in Maine, your active duty military pay is not taxable to Maine. If your only source of income is the active duty military pay, you are not required to file a Maine return. If you have other income sourced to Maine on your return, include all of your income and exclude the active duty military pay on the return. 

To exclude the active duty military pay received by a Maine nonresident, perform the following steps in the program:

1. State Section
2. Maine Nonresident Return
3. Subtractions From Income
4. Non-Maine active duty military pay
5. Enter amount of compensation
6. Save  

If one spouse is a resident of Maine and the other is not, the Maine resident spouse should file as a single individual using Form NRH. Schedule NRH is not supported within the program but you can print a copy of it on the Maine website. This is only available if you filed married filing joint on the federal return. 

You can also elect to file a married filing joint return (if married filing joint on the federal return) and be taxed on all of the income. 

Military Pension Income Deduction:

For tax years beginning on or after January 1, 2016, benefits received under a military retirement plan, including survivor benefits, are fully exempt from Maine income tax.

To enter the Pension Exclusion, follow the steps below in the program:

1. State Section
2. Subtractions From Income
3. Pension Income Deduction
4. Total Eligible Military Pension Income
5. Enter amount of pension in the Taxpayer or Spouse box
6. Save 

Additional Information

• Maine Residency "Safe Harbors"
• Maine "Determining Residency Status"
• Military Spouse Relief Act