Updated October 4, 2026. Quick answer: No. The 1040ME instructions say “fully exempt from Maine income tax” applies to benefits under a United States military retirement plan, including survivor benefits, claimed on line P9 of the pension deduction worksheet.
How Maine treats military retired pay
| Item | What the documents say |
|---|---|
| Treatment | Fully exempt; entered on line P9 of the pension deduction worksheet and carried to the pension income deduction line |
| Who qualifies | Retired pay from service in the Army, Navy, Air Force, Marines, Coast Guard or Space Force, including survivor benefits |
| Cap or age | None printed in the passage read |
| Rates on other income | 5.8%, 6.75% and 7.15% by bracket |
A $30,000 example
A retiree with $30,000 of military retired pay deducts all $30,000 on the pension deduction worksheet, so none of that pay is left to tax.
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What changes in 2026
No 2026 change is printed in the documents read.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Publication 3, Armed Forces’ Tax Guide.
Related: whether Maine taxes pensions, how Maine taxes retirement income, military retirement pay by state, and the military retirement calculator.
Sources
- 2025 Maine 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
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.