Updated September 4, 2026. Quick answer: Partially, and only if you are 65 or older (or totally disabled): Maryland’s Pension Exclusion shelters up to $41,200 of qualifying pension and 401(k)/403(b) income for 2025, reduced by Social Security received. Traditional and Roth IRAs do not qualify at all. Military retirement pay is separately, partially exempt up to $20,000 (age 55+) or $12,500 (under 55).
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 Maryland taxes retirement income generally.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Partially exempt via the Pension Exclusion, up to $41,200 for 2025, available only if age 65+ or totally disabled, reduced dollar-for-dollar by Social Security and Railroad Retirement received. |
|---|---|
| Private (employer) pensions | Same $41,200 exclusion and 65+/disability gate as public pensions; the statute defines qualifying plans by federal tax code section, not by employer type. |
| Federal government pensions (FERS/CSRS) | Same Pension Exclusion as public and private pensions, since the statute’s definition is based on the type of plan, not the level of government. |
| Military retirement pay | Partially exempt via a separate subtraction: up to $20,000 for retirees 55 or older, or up to $12,500 for those under 55, not a full exemption. |
| IRA and 401(k)/403(b) distributions | 401(k) and 403(b) plans qualify for the Pension Exclusion above; traditional and Roth IRA distributions do not qualify at all and remain fully taxable regardless of age. |
| General retirement-income exclusion | The Pension Exclusion itself is the general exclusion: $41,200 for 2025, gated on age 65+ or total disability, reduced dollar-for-dollar by Social Security and Railroad Retirement benefits. A separate $1,000 additional personal exemption applies for age 65+ or blindness, and a distinct $15,000 exclusion exists for retired public-safety employees 55+. |
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 Maryland, though it reduces the Pension Exclusion dollar-for-dollar. Social Security has its own rules in every state; see the full breakdown in how Maryland taxes retirement income generally.
Statute and sources
Governing citation: Md. Code Ann., Tax-General sec. 10-209(b) (Pension Exclusion), sec. 10-207(q) (military retirement).
Read September 4, 2026.
Related: how Maryland taxes retirement income generally · does Maryland 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.