Maine fully exempts military retirement pay from state income tax with no caps, no age requirements, and no phase-in — every dollar of military pension is untaxed at the state level. The state adds a meaningful property tax exemption for wartime veterans and a substantially larger one for paraplegic veterans, along with a notable homebuying benefit: the Maine State Housing Authority’s SaluteME program offers a 0.5% mortgage rate discount for active duty members, veterans, and retirees — one of the few state-run mortgage assistance programs that directly reduces the interest rate rather than just offering down payment help.
Maine is home to approximately 107,000 veterans. The state’s primary military installations include Bangor Air National Guard Base (101st Air Refueling Wing) and Portsmouth Naval Shipyard in Kittery, one of the nation’s premier submarine maintenance and repair facilities.
USMilitary.org is an independent educational resource, not affiliated with the Maine Bureau of Veterans’ Services, the VA, or any government agency. For official benefit information, visit maine.gov/veterans.
- Military retirement pay and SBP annuities are fully exempt from Maine income tax — no caps, no age requirements, no phase-in
- Qualifying wartime veterans age 62+ or with 100% VA disability receive a $6,000 property tax exemption; paraplegic veterans receive up to $50,000
- Maine National Guard members receive a 100% tuition waiver to attend any Maine state institution
- The SaluteME mortgage program offers a 0.5% rate reduction on home purchase loans for active duty, veterans, and retirees through the Maine State Housing Authority
- Active duty pay earned outside Maine is fully exempt from Maine income tax; military spouses’ wages earned in Maine are also exempt for non-resident spouses
- LD 888 (introduced 2025–2026 session) proposes expanding property tax eligibility to all honorably discharged veterans regardless of wartime service — monitor for enactment
- Income Tax Benefits
- Property Tax Exemptions
- SaluteME Mortgage Program
- Education Benefits
- Employment Benefits
- Maine Veterans Homes
- Hunting, Fishing, and Recreation
- Surviving Spouse Benefits
- How to Access Maine Veteran Benefits
- Frequently Asked Questions
Income Tax Benefits
Military Retirement Pay — Fully Exempt
Maine fully exempts all military retirement pay from state income tax. There are no caps on the exemption amount, no age requirements, and no phase-in period — the exemption applies regardless of rank, branch, or amount received. The exemption has been expanded to include Space Force retirees as well as retired officers of the U.S. Public Health Service and NOAA commissioned corps, effective with the 2026 tax year.
Survivor Benefit Plans — Fully Exempt
SBP, RCSBP, and RSFPP annuities are not taxed in Maine, following the same treatment as military retirement pay.
Military Disability Retirement Pay — Exempt
Military disability retirement pay received as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service is excluded from Maine taxable income.
Active Duty Pay — Partial Exemption
Military pay received by a Maine resident service member serving on active duty and stationed outside Maine is exempt from Maine income tax. Up to $6,000 of active duty pay earned while stationed in Maine is also deductible. Pay excluded from federal adjusted gross income for combat zone service is likewise excluded from Maine income tax.
Military Spouse Income Exemption
Eligible nonresident military spouses do not have to pay Maine income tax for wages earned in Maine. This applies when the spouse accompanies the service member to Maine under military orders and maintains legal residency in another state.
Property Tax Exemptions
Wartime Veteran Exemption — $6,000
Maine provides a $6,000 exemption from the just value of a qualifying veteran’s primary residence for property tax purposes. To qualify under current law, the veteran must:
- Have an other-than-dishonorable discharge
- Have served during a federally recognized war period, and be age 62 or older, OR be receiving 100% VA disability compensation, OR have become 100% disabled while serving
- Maine resident, primary residence
At Maine’s average property tax rate of approximately 1.09%, the $6,000 exemption saves roughly $65 per year — a modest benefit in dollar terms but broadly available. LD 888, introduced in the 2025–2026 legislative session, proposes expanding this to $5,000 for all honorably discharged veterans regardless of wartime service — veterans who served in peacetime would gain access to the exemption if this legislation passes.
Paraplegic Veteran Exemption — Up to $50,000
Paraplegic veterans and their qualifying surviving spouses are eligible for a significantly larger property tax exemption of up to $50,000 from the just value of their primary residence. At the average Maine property tax rate, this exemption saves approximately $545 per year. This is Maine’s largest property tax benefit for veterans and applies regardless of the home’s assessed value.
Property Tax Fairness Credit
Income-eligible Maine homeowners — including veterans — may claim the Property Tax Fairness Credit on their Maine income tax return. This refundable credit is available to residents who pay property taxes or rent exceeding a percentage of their income. Veterans with modest incomes who may not qualify for the veteran-specific exemptions may still benefit from this broader program.
SaluteME Mortgage Program
The Maine State Housing Authority (MaineHousing) offers the SaluteME and Salute Home Again programs, providing a 0.5% discount on mortgage interest rates for active duty service members, veterans, and military retirees purchasing a home in Maine. Key details:
- 0.5% below the standard MaineHousing first mortgage rate
- Available with little or no down payment
- Household income and home purchase price limits apply — most Maine households and homes qualify
- Limits vary by household size and location
On a $300,000 mortgage, a 0.5% rate reduction saves approximately $90 per month and over $32,000 in total interest over a 30-year loan. Contact MaineHousing at mainehousing.org for current rates and income limits.
Education Benefits
Maine National Guard Tuition Waiver — 100%
Members of the Maine National Guard receive a 100% tuition waiver to attend any Maine state institution — University of Maine system schools and Maine community colleges. The waiver covers tuition but typically not fees, room, or board. Contact your unit’s education officer or the Maine National Guard Education Office for current program details and eligibility requirements.
Veterans Education Benefits at Maine Institutions
Maine state colleges and universities participate in federal GI Bill programs including the Post-9/11 GI Bill and Yellow Ribbon Program. Maine also provides in-state tuition rates for active duty service members and certain veterans at state institutions. The Maine Bureau of Veterans’ Services can assist veterans in navigating education benefit options.
Employment Benefits
Veterans Employment Preference
Maine provides veteran preference in state government employment. Honorably discharged veterans receive preference in competitive hiring for state positions. The preference is also available to current and former Maine National Guard members in certain circumstances.
Maine Veterans Homes
Maine operates six veterans homes providing long-term skilled nursing care and residential care for eligible Maine veterans:
- Augusta, Bangor, Caribou, Machias, Scarborough, and South Paris
Maine Veterans’ Homes facilities are operated by a nonprofit organization chartered by the state legislature. Eligibility is based on veteran status, Maine residency, and the need for the level of care provided. Contact Maine Veterans’ Homes at MaineVets.org for current admission criteria and availability.
The Maine Veterans Memorial Cemetery in Augusta provides burial services for eligible veterans and their dependents.
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Hunting, Fishing, and Recreation
Maine provides hunting and fishing license benefits for qualifying veterans and active duty members. Contact the Maine Department of Inland Fisheries and Wildlife for current eligibility criteria and license discounts available to veterans with service-connected disabilities.
Maine state parks provide recreation opportunities throughout the state. Contact Maine State Parks for any available veteran or military discounts on camping and day-use fees.
Surviving Spouse Benefits
Unremarried surviving spouses of qualifying veterans may be eligible for the property tax exemptions described above. SBP and DIC payments are fully exempt from Maine income tax. Surviving spouses of paraplegic veterans retain eligibility for the $50,000 property tax exemption under qualifying circumstances.
How to Access Maine Veteran Benefits
- Maine Bureau of Veterans’ Services: maine.gov/veterans
- Property tax exemptions: Apply through your local town or city assessor’s office
- SaluteME mortgage program: mainehousing.org
- National Guard tuition waiver: Contact your unit’s education officer or Maine National Guard HQ
- Veterans homes: MaineVets.org
This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Maine Bureau of Veterans’ Services, the VA, or any government agency. Benefits are subject to change — verify current program details at maine.gov/veterans.
Frequently Asked Questions
No. Maine fully exempts all military retirement pay from state income tax with no caps, no age requirements, and no phase-in. The exemption covers all branches and all amounts and was expanded in 2026 to include Space Force retirees and USPHS/NOAA officers.
Qualifying wartime veterans age 62 or older, or those with 100% VA disability, receive a $6,000 exemption from the assessed value of their primary home. Paraplegic veterans receive up to $50,000. LD 888 in the current legislative session proposes expanding eligibility to all honorably discharged veterans — check maine.gov/veterans for updates.
SaluteME is a Maine State Housing Authority program that provides a 0.5% discount on mortgage interest rates for active duty service members, veterans, and military retirees buying a home in Maine. It’s available with little or no down payment and most Maine households qualify. Visit mainehousing.org for current rates and limits.
Yes. Maine National Guard members receive a 100% tuition waiver at any Maine state institution — covering tuition at University of Maine system schools and Maine community colleges. Contact your unit’s education officer for enrollment details.