130th MAINE LEGISLATURE
FIRST REGULAR SESSION-2021
Legislative Document No. 136
H.P. 92 House of Representatives, January 21, 2021
An Act To Increase the Maximum Pension Deduction for State
Income Tax
Received by the Clerk of the House on January 19, 2021. Referred to the Committee on
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative HANLEY of Pittston.
Cosponsored by Senator KEIM of Oxford.
Printed on recycled paper
 1 Be it enacted by the People of the State of Maine as follows:
2 Sec. 1. 36 MRSA §5122, sub-§2, ¶M-2, as amended by PL 2017, c. 170, Pt. H,
3 §3, is further amended by amending subparagraph (2), division (d) to read:
4 (d) "Pension deduction amount" means $10,000, except that, for tax years
5 beginning on or after January 1, 2021 but before January 1, 2026, "pension
6 deduction amount" means the pension deduction amount applicable to the
7 preceding tax year increased by $5,000. For tax years beginning on or after
8 January 1, 2026, "pension deduction amount" means $35,000.
9 Sec. 2. 36 MRSA §5403, sub-§7, as enacted by PL 2017, c. 474, Pt. B, §24, is
10 amended to read:
11 7. Personal exemptions. Beginning in 2018 and each year thereafter, by the dollar
12 amounts contained in section 5126‑A, subsection 1, except that for the purposes of this
13 subsection, notwithstanding section 5402, subsection 1-B, the "cost-of-living adjustment"
14 is the Chained Consumer Price Index for the 12-month period ending June 30th of the
15 preceding calendar year divided by the Chained Consumer Price Index for the 12-month
16 period ending June 30, 2017; and
17 Sec. 3. 36 MRSA §5403, sub-§8, as enacted by PL 2017, c. 474, Pt. B, §24, is
18 amended to read:
19 8. Personal exemption phase-out. Beginning in 2018 and each year thereafter, by
20 the dollar amount of the applicable amounts specified in section 5126‑A, subsection 2,
21 paragraphs A, B and C, except that for the purposes of this subsection, notwithstanding
22 section 5402, subsection 1-B, the "cost-of-living adjustment" is the Chained Consumer
23 Price Index for the 12-month period ending June 30th of the preceding calendar year
24 divided by the Chained Consumer Price Index for the 12-month period ending June 30,
25 2017.; and
26 Sec. 4. 36 MRSA §5403, sub-§9 is enacted to read:
27 9. Pension deduction. Beginning in 2025 and each year thereafter, by the pension
28 deduction amount defined in section 5122, subsection 2, paragraph M-2, subparagraph (2),
29 division (d) with respect to tax years beginning on or after January 1, 2026, except that for
30 the purposes of this subsection, notwithstanding section 5402, subsection 1-B, the
31 "cost-of-living adjustment" is the Chained Consumer Price Index for the 12-month period
32 ending June 30th of the preceding calendar year divided by the Chained Consumer Price
33 Index for the 12-month period ending June 30, 2025.
34 SUMMARY
35 This bill increases the maximum annual income tax pension deduction amount for
36 nonmilitary retirement pensions from $10,000 to $35,000 over a 5-year period beginning
37 with the 2021 tax year. The $35,000 pension deduction amount that applies after the 2025
38 tax year is subject to an annual inflation adjustment.
Page 1 - 130LR0705(01)


Statutes affected:
Bill Text LD 136, HP 92: 36.5122, 36.5403