Sec. 1. 36 MRSA §5122, sub-§2, ¶M, as enacted by PL 1999, c. 708, §36 and c. 731, Pt. S, §3 and affected by §4, is repealed and the following enacted in its place:

M.__An amount, for each recipient of benefits under an employee retirement plan, that is the lesser of:

(1)__Six thousand dollars reduced by the total amount of social security benefits and railroad retirement benefits paid by the United States, but not less than $0; or

(2)__The aggregate of benefits received under employee retirement plans and included in federal adjusted gross income.__For purposes of this paragraph, "employee retirement plan" means a state, federal or military retirement plan or any other retirement benefit plan established and maintained by an employer for the benefit of its employees under Section 401(a), Section 403 or Section 457(b) of the Code.__"Employee retirement plan" does not include an individual retirement account under Section 408 of the Code, a Roth IRA under Section 408A of the Code, a rollover individual retirement account, a simplified employee pension under Section 408(k) of the Code or an ineligible deferred compensation plan under Section 457(f) of the Code;

Sec. 2. 36 MRSA §5122, sub-§2, ¶¶N and O are enacted to read:

N.__Interest or dividends on obligations or securities of this State and its political subdivisions and authorities to the extent included in federal adjusted gross income; and

O.__For income tax years beginning on or after January 1, 2002, an amount equal to all income earned by the taxpayer for active duty in a national guard component of the Armed Forces of the United States.

SUMMARY

This bill exempts from the state income tax all income earned by a Maine resident for active duty in a national guard unit of the Armed Forces of the United States. It also corrects a lettering conflict created by Public Law 1999, chapters 708 and 731, which enacted 2 substantively different provisions with the same paragraph letter.