Updated October 19, 2026. Quick answer: Maine Schedule 1S lists the subtractions you take from federal adjusted gross income on Form 1040ME. Line 4 is the pension income deduction, and it comes from a worksheet printed on page 2 of the schedule. Lines 6 and 7 cover military survivor annuities and MainePERS pickup contributions, and the schedule total on line 27 carries to Form 1040ME.
What this form does
Schedule 1S is the Maine schedule headed “SUBTRACTIONS from federal adjusted gross income.” and it is enclosed with Form 1040ME. The 1040ME instructions describe line 4 this way: “Enter the pension income deduction from the Pension Income Deduction Worksheet, line P10.” They add “Include copies of your 1099 forms to verify the subtraction.” Maine retirement taxes covers how Maine treats retirement income more broadly.
The military portion is described in the same instructions: “The benefits received under a United States military retirement plan, including survivor benefits, are fully exempt from Maine income tax.”
Who it applies to
The instructions say what counts as deductible pension income: “Deductible pension income, other than military retirement pay, includes state and federal pension benefits and retirement benefits received from plans established and maintained by an employer for the benefit of its employees” under the Internal Revenue Code sections the booklet names. They add that “Deductible pension income also includes benefits received from an individual retirement account under IRC section 408”.
They also say who may claim it: “Only the individual who earned the benefit from prior employment may claim the pension income for the deduction.” For a surviving spouse the booklet says “a widowed spouse receiving survivor’s benefits under an eligible pension plan may claim that amount for purposes of this deduction”.
Some benefits are excluded. The instructions list “distributions received prior to age 55 that are not part of a series of equal periodic payments made over the life of the recipient and the recipient’s designated beneficiary” among the pension benefits that do not qualify, and also say “a conversion of benefits from one account to another does not qualify for the pension income deduction.”
The lines, one by one
| Line | What the form says |
|---|---|
| Schedule title | “Income Subtraction Modifications”, with the instruction “Enclose with your Form 1040ME.” |
| Line 4 | “Pension income deduction. (Enclose worksheet.)” |
| Line 4 check box | “Check here if the amount on line 4 includes military retirement pay” |
| Line 6 | “Military annuity payments made to a survivor of a deceased member of the military” |
| Line 7 | “Maine Public Employees Retirement System pickup contributions paid to the taxpayer during 2025 which have been previously taxed by the state.” |
| Line 27 | “Add lines 1 through 26” and “enter here and on 1040ME, line 15b.” |
| Worksheet title | “Worksheet for Pension Income Deduction”, with the instruction “Enclose this worksheet and copies of your 1099 form(s) with Form 1040ME.” |
| Line P1 | “Total eligible nonmilitary pension income (both Maine and non-Maine sources) included in your federal adjusted gross income (from federal Form 1040, lines 4b and 5b or Form 1040-SR, lines 4b and 5b)” and the caution “Include only deductible pension benefits that are not specifically excluded.” |
| Line P2 | “Maximum allowable deduction” |
| Line P3 | “Total social security and railroad retirement benefits you received”, then “whether taxable or not.” |
| Line P4 | “Subtract line P3 from line P2 (if zero or less, enter zero)” |
| Line P5 | “Enter the smaller of line P1 or line P4” |
| Line P6 | “If applicable, enter the amount from the Worksheet for Phaseout of Non-Military Pension Income Deduction, line 5.” |
| Line P7 | “Nonmilitary pension income deduction phaseout amount (multiply line P5 by line P6).” |
| Line P8 | “Nonmilitary pension income deduction amount (subtract line P7 from line P5).” |
| Line P9 | “Total eligible military retirement pay included in your federal adjusted gross income” |
| Line P10 | “Add lines P8 and P9. Enter the total for both spouses on Schedule 1S, line 4.” |
The instructions for the two non-pension lines are worth reading beside the table. Line 6: “The deduction must exclude any amount included in the Maine pension income deduction on Form 1040ME, Schedule 1S, line 4.” Line 7: “Use this line only if you retired after 1988 and are receiving retirement benefits from the Maine Public Employees Retirement System (MainePERS).” Your payer’s Form 1099-R figures feed these lines; see 1099-R boxes explained, Form 1040 line 5a and 5b and Form 1040 line 4a and 4b.
The figures the form prints
One figure sits in a single running sentence of the line 4 instructions: “you and your spouse (if married) may each deduct up to $48,216 of other eligible pension income”. The next sentence reads “The $48,216 cap must be reduced by any social security and railroad retirement benefits received, whether taxable or not.”
The Pension Income Deduction Worksheet points to a separate “Worksheet for Phaseout of Non-Military Pension Income Deduction” printed on page 2 of the schedule. Its income thresholds are laid out by filing status in that worksheet and in the caution above line P1, so they are not repeated here; read them on your own form.
Where the result goes next
The worksheet ends at line P10: “Add lines P8 and P9. Enter the total for both spouses on Schedule 1S, line 4.” The schedule’s total then goes to the return: “enter here and on 1040ME, line 15b.”
Edition and line numbers
This page reads the 2025 Form 1040ME General Instructions and the 2025 Form 1040ME Schedule 1S, Subtractions from Federal AGI for tax year 2025, the current file Maine Revenue Services served on 2026-10-19. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Treating a conversion as a deductible benefit. The instructions say “a conversion of benefits from one account to another does not qualify for the pension income deduction.”
- Claiming someone else’s pension. The instructions say “Only the individual who earned the benefit from prior employment may claim the pension income for the deduction.”
- Sending the schedule without the worksheet. The worksheet says “Enclose this worksheet and copies of your 1099 form(s) with Form 1040ME.”
Related: Maine retirement taxes, whether Maine taxes pensions, Maine 401(k) and IRA withdrawals, Form 1040 line 5a and 5b, and 1099-R boxes explained.
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Answer againSources
- 2025 Form 1040ME General Instructions, Maine Revenue Services: www.maine.gov
- 2025 Form 1040ME Schedule 1S, Subtractions from Federal AGI, Maine Revenue Services: www.maine.gov
- Related official page (not quoted): Title 36 section 5122, Modifications (statute text, background only), Maine Legislature: legislature.maine.gov
Read from the state revenue documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.