Military retirement benefits are not taxable to Maine. If your military retirement income is included in your federal adjusted gross income (AGI), you may subtract the full amount when calculating your Maine taxable income. Maine specifically allows a subtraction for military retirement and pension benefits attributable to service in the United States Armed Forces.
How Do I Enter My Military Retirement Income?
Military retirement income is not entered automatically as a Maine subtraction. You will need to manually enter the deduction after creating your Maine return.
To access this entry, go to:
- State Section
- Edit the Maine State Return
- Subtractions From Income
- Pension Income Deduction
- Total Eligible Military Pension Income
On the Pension Income Deduction screen, enter the total eligible military retirement income for each spouse in the appropriate field:
- Taxpayer - Total Eligible Military Pension Income
- Spouse - Total Eligible Military Pension Income
Enter only military retirement or military pension income in these fields.
Enter the taxable military retirement income reported on your federal return that is attributable to service in the United States Armed Forces.
If filing a joint return, enter each spouse's eligible military retirement income separately.
Do not include:
- Social Security benefits
- Railroad Retirement benefits
- Civilian pension income
- Annuity income that is not military retirement income
Those types of income may be subject to different Maine subtraction rules.
Important Notes
- Military retirement benefits are fully deductible for Maine income tax purposes.
- The deduction is claimed as a Maine income subtraction and reduces Maine taxable income.
- Keep your Form 1099-R and other retirement income records with your tax documents in case additional verification is needed.
Additional Information
Military Annuity Payments