The Foreign Service Journal, January-February 2014

78 JANUARY-FEBRUARY 2014 | THE FOREIGN SERVICE JOURNAL AFSA NEWS 2013 AFSA TAX GUIDE sions and annuities. Idaho taxes Foreign Service annuities while exempting certain categories of Civil Service employees. Several websites provide more information on individual state taxes for retirees, but the Retirement Living Information Cen- ter at www.retirementliving.com/taxes-by-state is one of the more comprehensive. ALABAMA Social Security and U.S. government pensions are not taxable. The combined state, county and city general sales and use tax rates range from 7 percent to as much as 10 percent. See also revenue.alabama.gov/taxpayerassist/retire.pdf. ALASKA No personal income tax. Most municipalities levy sales and/ or use taxes of between 2 and 7 percent and/or a property tax. ARIZONA Up to $2,500 of U.S. government pension income may be excluded for each taxpayer. There is also a $2,100 exemption for each taxpayer age 65 or over. Arizona does not tax Social Security. Arizona state sales and use tax is 5.6 percent, with additions depending on the county and/or city. ARKANSAS The first $6,000 of income from any retirement plan or IRA is exempt. Social Security is not taxed. There is no estate or inheritance tax. State sales and use tax is 6 percent; city and county taxes may add another 3 percent. CALIFORNIA Pensions and annuities are fully taxable. Social Security is not taxed. The sales and use tax rate varies from 7.25 percent (the statewide rate) to 10.5 percent in some areas. COLORADO Up to $24,000 of pension income is exempt if individual is age 65 or over. Up to $20,000 is exempt if age 55 to 64. State sales tax is 2.9 percent; local additions can increase the total to as much as 9.9 percent. CONNECTICUT Pensions and annuities are fully taxable for residents. Social Security is exempt if Federal Adjusted Gross Income is less than $50,000 for singles or $60,000 for joint filers. Statewide sales tax is 6.35 percent. No local additions. DELAWARE Pension exclusions per person: $2,000 is exempt under age 60; $12,500 if age 60 or over. There is an additional standard deduction of $2,500 if age 65 or over if you do not itemize. Social Security income is excluded from taxable income. Dela- ware does not impose a sales tax. DISTRICT OF COLUMBIA Pension or annuity exclusion of $3,000 is applicable if 62 years or older. Social Security is excluded from taxable income. Sales and use tax is 5.75 percent, with higher rates for some commodities (liquor, meals, etc.). FLORIDA There is no personal income, inheritance, gift tax or tax on intangible property. The state sales and use tax is 6 percent. Counties impose further taxes from 0.25 to 2.5 percent. GEORGIA $35,000 of retirement income is excluded for those who are 62 years or older or totally disabled. Up to $65,000 of retire- ment income is excludable for taxpayers that are 65 or older. Social Security is excluded from taxable income. Sales tax is 4 percent statewide, with additions of up to 3 percent depend- ing on jurisdiction. HAWAII Pension and annuity distributions from a government pen- sion plan are not taxed in Hawaii. Social Security is not taxed. Hawaii charges a general excise tax of 4 percent instead of sales tax. IDAHO If the individual is age 65 or older, or age 62 and disabled, Civil Service Retirement System and Foreign Service Retirement and Disability System pensions only qualify for a deduc- tion in 2013 of up to $30,396 for a single return and up to $45,594 for a joint return. Up to $30,396 may be deducted by the unmarried survivor of the annuitant. Federal Employ- ees’ Retirement System or Foreign Service Pension System pensions do not qualify for this deduction. The deduction is reduced dollar for dollar by Social Security benefits. Social Security itself is not taxed. Idaho state sales tax is 6 percent; some local jurisdictions add as much as another 3 percent. ILLINOIS Illinois does not tax U.S. government pensions or Social Secu- rity. State sales tax is 6.25 percent. Local additions can raise sales tax to 10.5 percent in some jurisdictions. INDIANA If the individual is over age 62, the Adjusted Gross Income may be reduced by the first $2,000 of any pension, reduced