What SRA says
Retirees pay federal and state income taxes on their Maryland pension income; SRA issues Form 1099-R each January. Federal and Maryland withholding can be requested (Form 766 / mySRPS; IRS Form W-4P and SRA Form 766.11); SRA withholds no other state's tax. If you live in another state after retiring, your pension may be subject to that state's taxes. Member contributions under employer pick-up are federally tax-deferred but subject to Maryland income tax while you work. The $3,000 health-premium exclusion SRA describes is only for retired public safety officers. ACPS Handbook pp. 33-34, Tax Reporting; p. 4, Employer Pick-Up Contributions; SRA web: Tax Withholding; SRA web: Health Insurance Premium Tax Exclusion FAQ
Payments are issued by mandatory direct deposit on the last day of each month. ACPS Handbook p. 33, Method of Payment
Your TPS pension is taxable; ask a tax adviser about Maryland exclusions.
What we use: No tax calculation.
While you're working
Under employer pick-up, member contributions are treated as employer contributions for federal income tax (federal tax deferred until membership ends); they remain subject to Maryland income tax. ACPS Handbook p. 4, Member Contributions; RCPB Handbook p. 4; ACFR FY2025 p. 164
Refunds and rollovers
If you leave and withdraw your contributions, you can have them paid to you or rolled over. Leaving teaching
What the sources say
- Your TPS pension is subject to federal and Maryland income tax. SRA sends a Form 1099-R each January and can withhold federal and Maryland tax (not other states').ACPS Handbook pp. 33-34, Tax Reporting; SRA web: Tax Withholding
- If you live in another state after retiring, your pension may be taxed by that state.ACPS Handbook p. 33
- While you work, your contributions are picked up by your employer: federal income tax on them is deferred, but they are still subject to Maryland income tax.ACPS Handbook p. 4, Employer Pick-Up Contributions
- Check with SRASRPS sources don't describe any Maryland state tax exclusion for pension income.ACPS Handbook pp. 33-34Maryland tax rules come from the Comptroller, not SRA.
- You can change your withholding in mySRPS, or with IRS Form W-4P (federal) and Form 766.11 (Maryland State Tax Withholding Request).SRA web: Tax Withholding
- If you choose no withholding, you may have to make quarterly estimated tax payments. SRA does not give tax advice; paying the tax is your responsibility.ACPS Handbook pp. 33-34, Tax Reporting
- Most payees get one 1099-R a year, but in the year you retire you get a separate 1099-R for any additional refunds, such as a refund of voluntary annuity contributions.SRA web: Tax Withholding
- Your first direct deposit comes with a mailed advice slip listing your payment and withholdings (taxes, health insurance); after that, slips come in January, July and whenever your net amount changes.ACPS Handbook p. 33, Method of Payment
Questions
Is my TPS pension taxable?
Yes. It's subject to federal and Maryland income tax. SRA sends a Form 1099-R each January.
Can SRA withhold taxes?
Yes, federal and Maryland. SRA doesn't withhold any other state's tax.
What if I move out of Maryland?
Your pension may be taxed by the state you live in.
Does Maryland exclude any pension income?
The SRA sources don't say. Ask a tax adviser or the Maryland Comptroller.
Source: SRPS Benefits Handbooks: Teachers' Pension System (Alternate Contributory Pension Selection; Reformed Contributory Pension Benefit), Revised April 2021, ACPS Handbook pp. 4, 33, 34; RCPB Handbook p. 4; ACFR FY2025 p. 164; SRA web pages. Last reviewed .