PLEASE NOTE: Legislative Information cannot perform research, provide legal advice, or interpret Maine law. For legal assistance, please contact a qualified attorney.
An Act To Repeal the Income Tax on Pick-up Contributions Paid to the Maine Public Employees Retirement System and To Clarify the Taxation of Pick-up Contributions Distributed in the Form of a Rollover
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5122, sub-§1, ¶G, as amended by PL 2011, c. 240, §30, is repealed.
Sec. 2. 36 MRSA §5122, sub-§2, ¶E, as amended by PL 1999, c. 414, §40 and affected by §57 and amended by PL 2007, c. 58, §3, is further amended to read:
 
E. Pick-up contributions paid to the taxpayer by the Maine Public Employees Retirement System or distributed as the result of a rollover, whether or not included in federal adjusted gross income, that have been previously taxed under this Part. For tax years beginning on or after January 1, 2017, in the case of a distribution as a result of a rollover, the modification allowed under this paragraph may be subtracted fully or in part during the tax year of the rollover. Any amount not subtracted in the tax year of the rollover may be subtracted within the 2 tax years immediately following the year of the rollover, except that the total amount subtracted over the 3-year period may not exceed the pick-up contributions that have been previously taxed under this Part;
Sec. 3. Application. This Act applies to tax years beginning on or after January 1, 2017.
 
SUMMARY
This bill repeals the individual income tax addition modification for state contributions to the Maine Public Employees Retirement System on behalf of the taxpayer and allows the subtraction modification for pick-up contributions distributed to the taxpayer in the form of a rollover to be subtracted from taxable income within a 3-year period beginning with the year of the rollover. The changes apply to tax years beginning on or after January 1, 2017.