Does Maine Tax Social Security?

Does Maine Tax Social Security?
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Aside from the states with no income tax at all, different states tax Social Security and other retirement benefits, such as pension payments and IRA withdrawals, in different ways. Some states offer tax breaks to seniors and retirees while others tax them effectively the same as any other residents. Generally speaking, Maine falls somewhere in the middle with regards to tax policy.


  • The state of Maine does not tax Social Security benefits. However, retirement pay is subject to taxation beyond $10,000 for single individuals and $20,000 for couples.

Maine Taxes and Retirement Pay

Retirement taxes by state authorities can vary a lot around the country, but the majority of states do not tax Social Security benefits. Maine is one of those states.

Additionally, you are generally allowed to deduct up to $10,000 in pension and retirement income, including income from IRAs and similar accounts, from your Maine income and effectively not pay tax on it. One catch is that you must first subtract the amount of Social Security benefits you receive from this $10,000 limit. Therefore, if you make too much in Social Security, you may not be able to claim the pension deduction at all.

If you are married and filing jointly, each spouse may claim the $10,000 for a total maximum deduction of $20,000.

If you are receiving military retirement pay or military survivor benefits, that pay is entirely exempt from Maine taxes.

Other Maine Taxes You May Owe

Of course, just because you are retired and earning a pension and Social Security doesn't mean you don't have other income that may be subject to Maine taxes. Generally, income in the state is taxed at marginal tax rates between 5.8 percent and 7.15 percent.

For example, if you work at another business after retiring, make money from investments or your own business, you may be subject to Maine income tax. Generally, you must file a Maine tax return if you live in Maine and must file a federal tax return, provided you made more than the combination of the Maine standard deduction and personal exemption amount. You may file if you're not required to do so if you're due a tax refund by the state.

Social Security Changes in 2018

While Maine's tax policies with regard to retirement pay and Social Security aren't changing in 2018, Social Security benefit amounts are generally rising in 2018. For people who receive Social Security benefits and another pension, this can mean less income eligible to be deducted under the Maine pension deduction.

Specifically, benefits are rising to a maximum of $2,788 per month from $2,687 per month in 2017. Some recipients will receive less, depending on their past earnings and when they started claiming benefits.

Social Security Benefits in 2017

The maximum Social Security monthly payment possible in 2017 is $2,687 per month. Some recipients received less based on individual circumstances.