Updated September 4, 2026. Quick answer: Partially, and the same way for public, private and federal pensions: each person may deduct up to $48,216 of pension income for 2025, reduced dollar-for-dollar by Social Security received. Military retirement pay is fully exempt.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Maine taxes retirement income generally.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Partially exempt via the general pension deduction: up to $48,216 per person for 2025, reduced dollar-for-dollar by Social Security and Railroad Retirement benefits received. |
|---|---|
| Private (employer) pensions | Same deduction and cap as public pensions; the statute treats state, federal and employer-plan pensions as one category. |
| Federal government pensions (FERS/CSRS) | Same treatment as state and private pensions, under one shared statutory definition of “employee retirement plan.” |
| Military retirement pay | Fully exempt, effective for tax years beginning January 1, 2016 (not a recent change); a 2025 law broadens the exemption to all uniformed services starting tax year 2026. |
| IRA and 401(k)/403(b) distributions | Partially exempt, folded into the same general pension deduction described above. A 2025 law added a carve-out excluding certain pre-age-55 lump-sum-style distributions from the deduction. |
| General retirement-income exclusion | $48,216 per person for 2025, reduced dollar-for-dollar by Social Security and Railroad Retirement benefits. New for 2025: the deduction phases out above $125,000 AGI (single/married filing separately), $187,500 (head of household), or $250,000 (married filing jointly). |
Coordinate this with your overall retirement plan
An adviser can help weigh how much of a pension or IRA withdrawal to take this year, whether a Roth conversion makes sense before or after a move, and how state tax interacts with the rest of your plan, but that does not replace the numbers in your own return.
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Social Security
Social Security is never taxed by Maine, though it reduces the pension deduction dollar-for-dollar. Social Security has its own rules in every state; see the full breakdown in how Maine taxes retirement income generally.
Statute and sources
Governing citation: 36 M.R.S. sec. 5122(2)(M-2) (pension and military deduction), (M-3) (2025 phaseout).
Read September 4, 2026.
Related: how Maine taxes retirement income generally · does Maine tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.