Maine state tax question for roth conversion and IRA rollover.

jennacarp
jennacarp Member Posts: 6 Newcomer
in Filing my taxes

I was a CT resident for first half of 2024 and a Maine resident for second half of 2024. While in CT, working in CT, I did a conversion for a work 403b to a roth 403b in the amount of X. I also contributed to a roth IRA by mistake, had to transfer it to a regular IRA, then backdoor it into the roth, with it growing by about Y during the conversions. X+y=Z, an amount I know I have to pay tax on federally and at the state level. Since all this happened during my time in CT, I put it as being 100% in the CT part year resident time and 0% in the ME part year resident time.

For the Maine state taxes though as a part-year resident, they say the following: you must file a Maine return based on their total federal adjusted gross income.  Your tax liability is first calculated as if you were a resident of Maine for the entire year.  You are then allowed to calculate a nonresident credit on Maine Schedule NR that will reduce your Maine tax by the portion of the tax that is related to the income you earned outside the state while a nonresident or safe harbor resident of Maine.

There is a part of the Maine tax form where you can list "pension income deduction" on freetaxusa. It says "Enter your total eligible military pension income included in your pension distributions above.". Z is the amount I can enter here as eligible or not eligible. If I list Z in this section, it gets subtracted from my taxable Maine income, but I'm not sure if I should be saying this amount is eligible or not.

What should I do for this part of the Maine tax form?

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Comments

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 609

    Hi Jennacarp,

    Thanks for joining the Community.

    Here is the tax help in the Maine software for that page and line for "eligible military pension income."

    "What is eligible military retirement pay for the Maine Pension Income Deduction?

    Benefits received under a military retirement plan, including survivor benefits, are eligible for the Pension Income Deduction if received as a result of service in the United States Army, Navy, Air Force, Marines, Coast Guard, or Space Force."

    If that is not military pension income, do NOT enter anything on the line for, "Enter your total eligible military pension income included in your pension distributions above."

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