Updated October 29, 2026. Quick answer: Partly, the same way as private pensions. “state and federal pension benefits and retirement benefits received from plans” qualify for a deduction of up to $48,216 per person for 2025, reduced by Social Security and railroad retirement benefits received.
What Maine does with a FERS or CSRS annuity
| Question | What the Maine documents say |
|---|---|
| What the source says | Maine counts federal pension benefits as deductible pension income, so a federal civil service annuity qualifies for the capped pension income deduction (Form 1040ME, Schedule 1A) rather than a full exemption. |
| Amount or limit | Each taxpayer, and each spouse, may deduct up to $48,216 of eligible pension income included in federal adjusted gross income for 2025, reduced by any social security and railroad retirement benefits received, taxable or not; military retirement pay is fully exempt and handled separately. |
| Age or other test | No minimum age for the deduction itself, but distributions received before age 55 are excluded unless part of a series of equal periodic payments over the recipient’s life or the joint lives of the recipient and beneficiary. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. For tax years beginning after 2025 the phaseout threshold amounts are adjusted for inflation. |
In the Maine documents’ own words
- “may each deduct up to $48,216 of other eligible pension income” (2025 Maine Individual Income Tax Form 1040ME General Instructions)
- “must be reduced by any social security and railroad retirement benefits received” (2025 Maine Individual Income Tax Form 1040ME General Instructions)
- “received prior to age 55 that are not part of a series” (2025 Maine Individual Income Tax Form 1040ME General Instructions)
- “$125,000 for single individuals or married individuals filing separate returns” (2025 Maine Individual Income Tax Form 1040ME General Instructions)
- “equal to the individual’s federal adjusted gross income with the modifications” (36 MRSA 5121 Maine taxable income of resident individual)
How this differs from other pensions in Maine
The instructions apply one rule to state and federal pension benefits and other employer plan benefits, so the federal pension is treated the same as a private employer pension under the same cap. The 2025 phaseout applies to all of them above $125,000 for single filers. See also Does Maine tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The instructions list 401(k) cash or deferred arrangements and IRA benefits as deductible pension income under the same cap, but do not name TSP specifically. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
What the Maine documents leave open
The Schedule 1A worksheet was not read; the General Instructions were. The instructions do not name TSP, CSRS or FERS, and the only 2026 change printed is inflation indexing of the phaseout thresholds.
Common mistakes
- Taking the full deduction with high Social Security income. The deduction is reduced dollar for dollar by those benefits.
- Ignoring the income phaseout above $125,000 for single filers.
Related: Does Maine tax pensions?, Maine military retirement pay, Maine retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- 2025 Maine Individual Income Tax Form 1040ME General Instructions: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/25_1040me_gen_instr_w_cover_pg.pdf
- 36 MRSA 5122 Modifications: https://legislature.maine.gov/statutes/36/title36sec5122.html
- 36 MRSA 5121 Maine taxable income of resident individual: https://legislature.maine.gov/statutes/36/title36sec5121.html
Read from the state documents linked above on October 29, 2026. General information, not tax advice.