Subsection (b) of part B of section 3 of chapter 62 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after clause (5) the following clause:-

(6) (A) For purposes of this clause, “taxable pension income” shall mean pension income that is taxable under section 2.

(B) A taxpayer shall be exempt from the tax under this chapter on the first $20,000 of taxable pension income.

(C) A taxpayer shall be exempt from the tax under this chapter on 100 per cent of taxable pension income if the taxpayer has paid over 20 years of tax on taxable pension income.

(D) For the purposes of this clause the taxpayer shall be:

(i) a resident of the commonwealth;

(ii) over the age of 65; and

(iii) at or below the area median income where the taxpayer resides as defined by the department of housing and community development.