Active-duty pay
Taxed
Active-duty pay taxable; combat zone pay exempt per federal rules.
State Guide · ME
Maine — Military Tax Treatment
Maine taxes active duty and Guard pay but fully exempts military retirement. Retirees in Maine get a clean break on retirement income.
Tax treatment at a glance
Guard & Reserve drill pay
Taxed
Guard and Reserve drill pay is taxable Maine income. SCRA protections apply during federal activation but not routine drill.
Military retirement pay
Fully Exempt
Military retirement pay fully exempt as of 2016.
The numbers · verified for tax year 2025
Top marginal rate
7.15%
Retirement-pay exemption
Full
Benefits under a U.S. military retirement plan, including survivor benefits, are fully exempt from Maine income tax — no cap, no age threshold.
Standard deduction
For 2025 the base standard deduction is $15,000 single / $30,000 married filing jointly (phases out above ~$100k single / ~$200k MFJ). Brackets top out at 7.15%.
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — Maine included.
Survivor Benefit Plan (SBP)
Follows retirement
Maine exempts military retirement — SBP annuities are generally exempt.
Federal rules that override state law
SCRA — Servicemembers Civil Relief Act
Active-duty servicemembers pay state income tax only to their state of legal domicile — not the state where they are stationed. If you are from Texas and stationed in Maine, Maine cannot tax your military pay. This applies during all active duty periods and during Guard/Reserve mobilizations on federal (Title 10) orders.
MSRRA — Military Spouses Residency Relief Act
Military spouses can maintain their home-state domicile even when living in a different state due to their servicemember's orders. A spouse who is a Texas resident following their servicemember to Maine can keep Texas as their tax domicile and avoid Maine state income tax on their wages.
Guard & Reserve — the SCRA gap
SCRA pay protections apply during federal (Title 10) activation orders. During routine drill weekends and state-only activations, Guard and Reserve members are state residents serving in their home state — SCRA does not protect their drill pay from state income tax. Whether Maine exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01Retirement exemption: ME Form 1040, line 19 (pension income deduction)
- 02Combat zone pay: still federally excluded — report on ME Schedule 1
Veteran-specific tax benefits
Property tax exemption for 100% disabled vets.
Official authority
https://www.maine.gov/revenue/ ↗State tax law changes annually. Verify current rules with the Maine Department of Revenue before making any tax decision.
Maine military tax — common questions
Does Maine tax military retirement pay in 2026?
Maine fully exempts military retirement pay. Military retirement pay fully exempt as of 2016.
Does Maine tax active-duty military pay?
Maine taxes active-duty military pay for state residents. Active-duty pay taxable; combat zone pay exempt per federal rules. Under the SCRA, Maine can only tax the military pay of service members who are legally domiciled in Maine — not those merely stationed there.
Does Maine tax National Guard and Reserve drill pay?
Maine taxes Guard and Reserve drill pay. Guard and Reserve drill pay is taxable Maine income. SCRA protections apply during federal activation but not routine drill.
Is VA disability compensation taxed in Maine?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including Maine — taxes it as income.
If I'm stationed in Maine but claim another state, can Maine tax my military pay?
No. Under the Servicemembers Civil Relief Act (SCRA), active-duty pay is taxable only by your state of legal domicile, not the state where you are stationed. If your domicile is elsewhere, Maine cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
Related tools
Other state guides