Updated October 16, 2026. Quick answer: Maine lets each person deduct up to $48,216 of eligible pension income, and its booklet lists “benefits received under IRC section 457(b)”; it lists section 403 as employee annuities without printing 403(b), and a 457(b) distribution made before age 55 is not eligible unless it is part of a series of substantially equal periodic payments.
More state retirement-income schedules, line by line: Maine Schedule 1S.
Maine at a glance
| Item | What the documents say |
|---|---|
| How the state treats 403(b) and 457(b) withdrawals | 457(b) is named as eligible; 403(b) is not printed |
| Do the state’s documents name these plans? | The documents read name 457 plans but not 403(b) plans |
| Retirement exclusion or credit | Pension income deduction of up to $48,216 per person, reduced by Social Security and railroad retirement benefits |
| Public-employee pension rule | Separate Schedule 1S line 7 subtraction for MainePERS benefits if retired after 1988; military retirement pay is separately exempt |
| Rate in the documents read | Progressive: 5.8%, 6.75% and 7.15% in the booklet’s table |
| Changed for 2026? | The documents read describe no 2026 change |
What the Maine documents say
The booklet says taxpayers “may each deduct up to $48,216 of other eligible pension income” and lists plans under “and 403 (employee annuities)” without the letter b. The statute’s wording is “Section 401(a), Section 403 or Section 457(b)”, and it excludes distributions made prior to age 55 that are not part of a series of substantially equal periodic payments.
The booklet’s rate table begins at “5.8% of Maine taxable income”.
Withholding and federal tax
Whether a state withholds is a separate rule: see state withholding on retirement withdrawals. Federal rules: 403(b) withdrawal rules and 457(b) withdrawal rules. The IRS says pension and annuity payments from a qualified employer plan have “all or some portion of the amounts you receive may be taxable”.
What the documents do not say
- The documents read never print 403(b); they refer to Section 403 and employee annuities.
- The booklet is for tax year 2025, and its rate table is progressive; a reader’s own rate depends on income.
Common mistakes
- Assuming Maine’s rule for a 401(k) or IRA also covers a 403(b) or 457(b): read whether its documents name the plan.
Related: whether Maine taxes 401(k) and IRA withdrawals, Maine retirement taxes, whether Maine taxes pensions, 403(b) withdrawal rules, 457(b) withdrawal rules, and state withholding on retirement withdrawals.
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Answer againSources
- 2025 Maine Income Tax Resident Booklet (Form 1040ME general instructions with cover page): https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/25_1040me_gen_instr_w_cover_pg.pdf
- 36 M.R.S. 5122 Modifications reducing federal adjusted gross income: https://legislature.maine.gov/statutes/36/title36sec5122.html
- IRS Tax Topic 410, Pensions and annuities: https://www.irs.gov/taxtopics/tc410
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.