Menu burger Close thin Facebook Twitter Google plus Linked in Reddit Email arrow-right-sm arrow-right
Loading
Tap on the profile icon to edit
your financial details.

Maine Retirement Tax Friendliness

Your Details Done

Overview of Maine Retirement Tax Friendliness

While Maine does not tax Social Security income, other forms of retirement income are taxed at rates as high as 7.15%. It also has above average property taxes, as well as an estate tax.

To find a financial advisor who serves your area, try our free online matching tool.

Enter your financial details to calculate your taxes
Annual Social Security Income
Dismiss
Annual Retirement Account Income
Dismiss
Annual Wages
Dismiss
Location
Dismiss
Year of Birth
Dismiss
Filing Status
Annual Income from Private Pension
Dismiss
Annual Income from Public Pension
Dismiss
You will pay of Maine state taxes on your pre-tax income of
Your Tax Breakdown
Federal
State
Local
Total Taxes
Quick Guide to Retirement Income Taxes
is toward retirees.
Social Security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, and your marginal state tax rate is %.
Save more with these rates that beat the National Average
Unfortunately, we are currently unable to find savings account that fit your criteria. Please change your search criteria and try again.
Searching for accounts...
As of
Marketing Disclosure
Unfortunately, we are currently unable to find savings account that fit your criteria. Please change your search criteria and try again.
Searching for accounts...
As of
Marketing Disclosure
Share Your Feedback
How would you rate your experience using this SmartAsset tool?
What is the most important reason for that score? (optional)
Please limit your response to 150 characters or less.
Thank you for your answer! Your feedback is very important to us.

Maine Retirement Taxes

Photo credit: ©iStock.com/KeithBinns

According to the National Oceanic and Atmospheric Administration, Maine has 3,478 miles of coastline, fourth-most of any state. That means plenty of space to sail, swim, kayak or watch the sunrise. Those are all good reasons to choose Maine as a retirement destination, but what about the state’s tax system?

Compared with other states, Maine has relatively punitive tax rules for retirees. While it does not tax Social Security income, other forms of retirement income are taxed at rates as high as 7.15%. It also has above average property taxes. However, the estate tax exemption here is among the highest state exemption levels.

A financial advisor can help you plan for retirement and other financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Is Maine tax-friendly for retirees?

Social Security is exempt from taxation in Maine, but other forms of retirement income are not. Seniors who receive retirement income from a 401(k), IRA or pension will pay tax rates as high as 7.15%, though a small deduction is available.

The state’s property taxes are somewhat higher than the national median at a 1.28% effective rate. Maine's estate tax exemption threshold is $6.8 million for 2024, which is high for a state figure. But this is still well below the federal threshold of $13.61 million for 2024.

Is Social Security taxable in Maine?

All Social Security income in Maine is exempt from the state income tax. Any Social Security income included in your federal adjusted gross income (AGI) should be subtracted out of your Maine income when filing you state income tax return.

Are other forms of retirement income taxable in Maine?

Income from retirement savings accounts like an IRA or 401(k) is taxable. Pension income, whether from a public employee pension fund or from a private employer, is also taxable. However, the state does not tax military pensions.

In 2023, the state allowed you to deduct up to $35,000 in pension income. In 2024, the value of the pension deduction will be equal to to the maximum annual benefit allowable at full retirement age under the Social Security Act ($45,864 in 2024). However, you cannot claim this deduction on your other forms of retirement income. In that case, all your other retirement income will be taxed as part of your gross income at the rates shown in the bracket table below.

Income Tax Brackets

Single Filers
Maine Taxable IncomeRate
$0 - $24,5005.80%
$24,500 - $58,0506.75%
$58,050+7.15%
Married, Filing Jointly
Maine Taxable IncomeRate
$0 - $49,0505.80%
$49,050 - $116,1006.75%
$116,100+7.15%
Married, Filing Separately
Maine Taxable IncomeRate
$0 - $24,5005.80%
$24,500 - $58,0506.75%
$58,050+7.15%
Head of Household
Maine Taxable IncomeRate
$0 - $36,7505.80%
$36,750 - $87,1006.75%
$87,100+7.15%

How high are property taxes in Maine?

A typical Maine homeowner can expect to pay about $2,722 in property taxes. While this rate is higher than the national average, the median home value in Maine is lower than the national median at $212,100.

What is the Maine homestead exemption?

Maine homeowners whose home is their permanent residence and they've owned it for at least 12 months are eligible for the homestead exemption. It is worth up to $25,000, which is subtracted from the home’s taxable value prior to the application of local tax rates.

Senior veterans are also eligible for the veteran exemption. It is equal to $6,000 and available to any veteran who is age 62 or older and served during a recognized war period.

Photo credit: ©iStock.com/jmorse2000

How high are sales taxes in Maine?

The state sales tax rate in Maine is relatively low at 5.5%, but there are no additional county or city rates collected on top of that. Therefore, 5.5% is the highest possible rate you can pay in the entire state of Maine.

Seniors also benefit from a number of major sales tax exemptions. Items exempt from the sales tax in Maine include groceries, prescription drugs and durable medical equipment, such as wheelchairs.

What other Maine taxes should I be concerned about?

The Maine estate tax applies to all estates with a taxable value of $6.8 million or higher in 2024. The state charges an 8% estate tax on the portion of an estate that exceeds $6.8 million in value, up to $9.8 million. Property in excess of $9.8 million is taxed at 10% up to $12.8 million. Estates worth more than $12.8 million will pay a 12% on all property in excess of that threshold.