Sec. 1. 36 MRSA §5122, sub-§2, śM, as amended by PL 2001, c. 396, §34 and affected by §50, is further amended to read:

M. An amount, for each recipient of benefits under an employee retirement plan, that is the lesser of:

(1) Six Ten thousand dollars reduced by the total amount of the primary recipient's social security benefits and railroad retirement benefits paid by the United States, but not less than $0. The reduction does not apply to benefits paid under a military retirement plan; or

(2) The aggregate of benefits received by the primary recipient under employee retirement plans and included in federal adjusted gross income.

For purposes of this paragraph, "employee retirement plan" means a state, federal or military retirement plan or any other retirement benefit plan established and maintained by an employer for the benefit of its employees under Section 401(a), Section 403 or Section 457(b) of the Code. "Employee retirement plan" does not include an individual retirement account under Section 408 of the Code, a Roth IRA under Section 408A of the Code, a rollover individual retirement account, a simplified employee pension under Section 408(k) of the Code or an ineligible deferred compensation plan under Section 457(f) of the Code. For purposes of this paragraph, "military retirement plan" means benefits received as a result of service in the active or reserve components of the Army, Navy, Air Force, Marines or Coast Guard;

Sec. 2. Application. That section of this Act that amends the Maine Revised Statutes, Title 36, section 5122, subsection 2, paragraph M applies to tax years beginning on or after January 1, 2004.

SUMMARY

This bill increases from $6,000 to $10,000 the amount of the state income tax deduction for income received from public, private and military pensions.