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Frequently Asked Questions for Seniors and Retirees

7. Can I claim Maryland's pension exclusion?

If you are 65 or older or totally disabled (or your spouse is totally disabled), you may be able to subtract some of your taxable pension and retirement annuity income. Maryland's maximum pension exclusion is $29,900. Carefully review the age and disability requirements in Instruction 13 of the Maryland resident tax booklet.

This subtraction applies only if:

  1. You were 65 or older or totally disabled, or your spouse was totally disabled, on the last day of the tax year; AND
  2. You included on your federal return taxable income received as a pension, annuity or endowment from an “employee retirement system” qualified under Sections 401(a), 403 or 457(b) of the Internal Revenue Code. A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh plan, an ineligible deferred compensation plan or foreign retirement income does not qualify.

If you are not eligible for the standard pension exclusion above and you are a retired law enforcement officer or fire, rescue, or emergency services personnel, you may still qualify for a pension exclusion of up to $15,000 if you meet the following requirements: 

  1. You were 55 or over on the last day of the tax year, AND
  2. You were not 65 or older, or totally disabled, or have a spouse who is totally disabled, AND
  3. You included on your federal return taxable income received as a pension, annuity or endowment from an “employee retirement system” qualified under Section 401(a), 403 or 457(b) of the Internal Revenue Code, AND
  4. The retirement income is attributable to your service as a law enforcement officer or fire, rescue, or emergency services personnel of the United States, the State of Maryland, or a political subdivision of Maryland.

Instruction 13 of the Maryland resident tax booklet provides further details on claiming the subtraction.

For more information, see Maryland's Pension Exclusion.



 
Links for Seniors and Retirees FAQs
Individual Tax Types
Income Tax
Filing Information
If You Are a Senior Citizen
Seniors and Retirees FAQs
  q1 - Do I have to file a Maryland return?
  q2 - What is Maryland's state income tax rate?
  q3 - How is the local income tax calculated?
  q4 - What's important to know about personal exemptions?
  q5 - What benefits are available for two-income couples?
  q6 - Does Maryland tax Social Security benefits?
  q7 - Can I claim Maryland's pension exclusion?
  q8 - Does Maryland offer a tax break for long-term care insurance?
  q9 - Is there a special tax benefit for military retirees?
  q10 - I am retired from the federal government. Can I have state tax withheld from my pension?
 
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