Probably only of interest to those (like me) who are newly retired and considering moving north, but it seems Maine is trying to make itself more appealing to retirees by increasing its pension tax exemption from the $10K it allowed a few years ago, to $45K now. Kinda interesting in that Maine is already the state with the oldest per capita population. Still not quite as good a deal as NH, but noteworthy in that Maine's housing prices -- especially once you get away from Portland -- are still considerably lower.
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Maine seems to be increasing its pension tax exemption
- Thread starter podunk77
- Start date
Yes but….Currently the pension exclusion is reduced by the social security amount. The way I read the below is that is that you get $30k and some Social Security amount but when I asked Maine Revenue I was told that it’s the $30k minus the Social Security as it always has been. We’ll have to wait and see what the tax booklet looks like.
Maine Revised Statutes Title 36, §5122. MODIFICATIONS
(d) "Pension deduction amount" means:
(iii) For tax years beginning in 2023, $30,000; and
(iv) For tax years beginning on or after January 1, 2024, the maximum annual benefit that an individual eligible to retire at the retirement age, as defined in 42 United States Code, Section 416(l), as of January 1st of the tax year may receive under the federal Social Security Act and amendments to that Act as of June 28, 2023.
We were also looking to relocate back to Maine when we retired but COVID hit and the houses are two and three times higher than just a few years ago, then you have one of the highest tax burdens in the country. WalletHub has it at the #4 highest.
Where did you get the $45k number from?
Maine Revised Statutes Title 36, §5122. MODIFICATIONS
(d) "Pension deduction amount" means:
(iii) For tax years beginning in 2023, $30,000; and
(iv) For tax years beginning on or after January 1, 2024, the maximum annual benefit that an individual eligible to retire at the retirement age, as defined in 42 United States Code, Section 416(l), as of January 1st of the tax year may receive under the federal Social Security Act and amendments to that Act as of June 28, 2023.
We were also looking to relocate back to Maine when we retired but COVID hit and the houses are two and three times higher than just a few years ago, then you have one of the highest tax burdens in the country. WalletHub has it at the #4 highest.
Where did you get the $45k number from?
I got the $45K figure from the two sources below. I haven't crunched the numbers as well as you have -- and you're right, whether or not that figure is reduced by Social Security makes a big differece -- but things seem to be trending in the right direction in terms of Maine being a tax-friendlier state for pensioners.
penobscotfa.com
www.mainepers.org
Making the Most of the Maine Pension Income Deduction | Penobscot Financial Advisors
The Maine Pension Income Deduction has provided a modest discount on Maine income taxes to retirees over the past decade. For most, Social Security benefits ...
penobscotfa.com
Important Information About the Maine Pension Income Deduction and Your MainePERS Benefit - MainePERS
Important Information About the Maine Pension Income Deduction and Your MainePERS Benefit Individuals who receive MainePERS benefits and file their taxes with the State of Maine may qualify for a pension income deduction for all or part of their MainePERS benefit. The amount of the pension...