Maine retirement taxes at a glance (2026)
| State income tax | Graduated, top rate 7.15%Maine has three brackets from 5.8% to 7.15%; the top rate starts at $64,849 single / $129,749 joint for 2026. |
|---|---|
| Social Security | Not taxedMaine allows a full subtraction of Social Security benefits. |
| Pensions | Partly taxedEach person can deduct up to $49,824 of pension income in 2026 ($48,216 in 2025), reduced by any Social Security or railroad retirement benefits received. Exclusion: up to $49,824. |
| 401(k) and IRA withdrawals | Partly taxedIRA, Roth IRA, 401(k), 403 and 457(b) distributions count toward the same pension deduction. Distributions before age 55 that are not periodic payments do not qualify. |
| Government pensions | Partly taxedState and federal pensions qualify for the capped pension deduction. MainePERS retirees who retired after 1988 can also subtract previously taxed pick-up contributions. |
| Military retirement pay | Not taxedU.S. military retirement pay and survivor benefits are fully exempt, with no Social Security offset. |
| Estate tax | Yes, above $7,160,000Maine taxes estates above $7,160,000 in 2026. |
| Inheritance tax | No |
| Property tax help for seniors | A homestead exemption of up to $25,000 applies to primary homes. Residents 65+ or disabled with income under $80,000 and liquid assets under $100,000 can defer property taxes. |
| Sales tax | Maine has a 5.5% state sales tax and no local sales tax. |
Recent changes and good to know
- From tax year 2025 the non-military pension deduction phases out above federal AGI of $125,000 (single), $187,500 (head of household) or $250,000 (joint); thresholds are indexed after 2025.
- From September 24, 2025, distributions received before age 55 that are not substantially equal periodic payments no longer qualify.
- The deduction cap is tied to the maximum annual Social Security benefit and rose to $49,824 for 2026.
How to lower your retirement taxes in Maine
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Maine too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does Maine tax retirement income?
Partly: Maine exempts Social Security and military pensions and lets retirees deduct up to $49,824 of other pension income in 2026, then taxes the rest.
Does Maine tax Social Security?
Maine allows a full subtraction of Social Security benefits.
Does Maine tax pensions?
Each person can deduct up to $49,824 of pension income in 2026 ($48,216 in 2025), reduced by any Social Security or railroad retirement benefits received.
Does Maine tax 401(k) and IRA withdrawals?
IRA, Roth IRA, 401(k), 403 and 457(b) distributions count toward the same pension deduction. Distributions before age 55 that are not periodic payments do not qualify.
Does Maine tax military retirement pay?
U.S. military retirement pay and survivor benefits are fully exempt, with no Social Security offset.
Does Maine have an estate or inheritance tax?
Maine taxes estates above $7,160,000 in 2026.
Sources (last verified 2026)
- 2025 Form 1040ME General Instructions (Important Changes; Schedule 1S Line 4) — Maine Revenue Services (2025)
- 2026 Form 1040ES-ME Estimated Tax Worksheet — Maine Revenue Services (2026-07)
- Individual Income Tax FAQ — Maine Revenue Services (2026)
- Maine State Tax Guide — AARP (2026-05-21)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026-02-17)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.