In this pioneering study, we unveiled a groundbreaking approach for actuating rehabilitation robots through the innovative use of magnetic technology as a seamless haptic force generator, offering a leap forward in enhancing user interface and experience, particularly in end-effector-based robots for upper-limb extremity motor rehabilitation. We employed the Extended Kalman Filter to meticulously analyze and formalize the robotic system's nonlinear dynamics, showcasing the potential of this sophisticated algorithm in accurately tracking and compensating for disturbances, thereby ensuring seamless and effective motor training. The proposed planar robotic system embedded with magnetic technology was evaluated with the recruitment of human subjects. We reached a minimum RMS value of 0.2 and a maximum of 2.06 in our estimations, indicating our algorithm's capability for tracking the system behavior. Overall, the results showed significant improvement in smoothness, comfort, and safety during execution and motor training. The proposed novel magnetic actuation and advanced algorithmic control opens new horizons for the development of more efficient and user-friendly rehabilitation technologies.