The basics
MainePERS mails Form 1099-R each January. Recipients owe state tax to the state where they live. Maine has already taxed your pick-up contributions, so they are subtracted again (Box 2a minus Box 16) on Maine Schedule 1. MainePERS Benefit Payment and Tax page, FAQs 3, 4; 36 M.R.S. §5122(1)(G), §5122(2)(E)
Maine's pension income deduction
Maine residents may deduct all or part of their MainePERS benefit. The deduction is the maximum annual Social Security benefit for someone retiring that year at full retirement age, reduced by any Social Security or railroad retirement benefits received. For 2025 the maximum is $48,216. From tax year 2025 it phases out above federal AGI of $125,000 (single), $187,000 (head of household) or $250,000 (joint). MainePERS Pension Income Deduction page
The law sets the cap and phase-out: the deduction is cut by the share of your federal AGI over the threshold, divided by $100,000 ($50,000 if married filing separately). 36 M.R.S. §5122(2)(M-2), (M-3)
| Filing and federal AGI | Pension | Social Security | Deduction |
|---|---|---|---|
| Single, AGI $60,000 | $40,000 | $0 | $40,000 |
| Single, AGI $60,000 | $40,000 | $20,000 | $28,216 |
| Single, AGI $80,000 | $60,000 | $0 | $48,216 |
| Single, AGI $150,000 | $40,000 | $0 | $30,000 |
| Head of household, AGI $187,300 | $40,000 | $0 | $40,000 |
The deduction is the smaller of your pension and $48,216 minus Social Security, then phased out. These follow the statute's phase-out. 36 M.R.S. §5122(2)(M-2), (M-3)
MainePERS's pension deduction page says the phase-out starts at $187,000 for head-of-household filers; the statute says $187,500. Our calculator uses the statute.
MainePERS Pension Income Deduction page; 36 M.R.S. §5122(2)(M-3)(2)The deduction cap follows the maximum Social Security benefit each year and the phase-out amounts are inflation-adjusted. Our sources give the 2025 cap ($48,216) only.
What we do: We estimate the deduction for 2025 only.
What would settle it: Maine Revenue Services' Schedule 1 instructions for the tax year.Who qualifies
- The pension income must be earned by the person receiving it, except a spouse receiving survivor benefits. A spouse receiving part of the benefit while both live, a former spouse under a QDRO, and disability income reported as wages do not qualify. MainePERS Pension Income Deduction page
- Distributions subject to the IRS 10% early distribution tax (Code §72(t)) are not 'retirement plan benefits' for the deduction. 36 M.R.S. §5122(2)(M-2)(2)(f)
Withholding and refunds
- Change Maine withholding with Form W-4ME and federal with W-4P. MainePERS Pension Income Deduction page; After You Retire (2025) p. 2, Tax Exemptions/Allowances
- Refunds paid directly may be taxed; under 59 1/2 the IRS 10% early distribution tax may apply. Handbook p. 10
This is general information from MainePERS and Maine law, not tax advice. Social Security
From the sources
- Maine residents can deduct all or part of a MainePERS pension. The cap is the year's maximum Social Security benefit at full retirement age ($48,216 for 2025), less any Social Security or railroad retirement you got.MainePERS Pension Income Deduction page; 36 M.R.S. §5122(2)(M-2)
- Check with MainePERSFrom tax year 2025 the deduction phases out above federal AGI of $125,000 (single), $187,500 (head of household) or $250,000 (joint), over the next $100,000.36 M.R.S. §5122(2)(M-3)
- Maine already taxed your MainePERS contributions, so that part of your benefit (the 'pick-up contributions', Box 2a minus Box 16 on your 1099-R) is subtracted on Maine Schedule 1.MainePERS Benefit Payment and Tax page, FAQ 4; 36 M.R.S. §5122(2)(E)
- You owe state tax where you live. Change Maine withholding with Form W-4ME.MainePERS Benefit Payment and Tax page, FAQ 3; After You Retire (2025) p. 2
Questions
Does Maine tax my MainePERS pension?
Maine residents can deduct all or part of it. For 2025 the deduction is up to $48,216, less any Social Security or railroad retirement benefits you received, and it phases out at higher incomes.
Why is part of my 1099-R not taxed by Maine?
Maine already taxed your contributions (the 'pick-up contributions'), so that part is subtracted again on Maine Schedule 1.
How do I change withholding?
Change Maine withholding with Form W-4ME and federal with W-4P.
Source: MainePERS Benefits for Teachers: Teacher Member Handbook, 2026, p. 10. Also: MainePERS Benefit Payment and Tax page; MainePERS Pension Income Deduction page; After You Retire (2025); 36 M.R.S. § 5122. Last reviewed .