The Foreign Service Journal, January-February 2014

THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2014 79 AFSA NEWS 2013 AFSA TAX GUIDE dollar for dollar by Social Security benefits. There is also a $1,000 exemption if over 65, or $1,500 if Federal Adjusted Gross Income is less than $40,000. There is no pension exclu- sion for survivor annuitants of federal annuities. Social Secu- rity is not taxed in Indiana. Sales tax and use tax in Indiana is 7 percent. IOWA Generally taxable. A married couple with an income for the year of less than $32,000 may file for exemption, if at least one spouse or the head of household is 65 years or older on Dec. 31, and single persons who are 65 years or older on Dec. 31 may file for an exemption if their income is $24,000 or less. The same income tax rates apply to annuities as to other incomes. Iowa is phasing out taxation of Social Security benefits (as of 2014, Social Security benefits will not taxed), but a portion is still subject to tax in 2013. Statewide sales tax is 6 percent, with no more than 1 percent added in local jurisdictions. KANSAS U.S. government pensions are not taxed. Extra deduction of $850 if over 65. Social Security is exempt if Federal Adjusted Gross Income is under $75,000. State sales tax is 6.15 per- cent, with additions of between 1 and 4 percent depending on jurisdiction. KENTUCKY Government pension income is exempt if retired before Jan. 1, 1998. If retired after Dec. 31, 1997, pension/annuity income up to $41,110 remains fully excludable for 2013. Social Security is exempt. Sales and use tax is 6 percent statewide, with no local sales or use taxes. LOUISIANA Federal retirement benefits are exempt from Louisiana state income tax. There is an exemption of $6,000 of other annual retirement income received by any person age 65 or over. Married filing jointly may exclude $12,000. State sales tax is 4 percent with local additions up to a possible total of 10.75 percent. Use tax is 8 percent regardless of the purchaser’s location. MAINE Recipients of a government sponsored pension or annu- ity who are filing singly may deduct up to $6,000 ($12,000 for married filing jointly) on income that is included in their Federal Adjusted Gross Income, reduced by all Social Security and railroad benefits. For those age 65 and over, there is an additional standard deduction of $1,400 (single),$1,100 (mar- ried filing singly) or $2,200 (married filing jointly). General sales tax is now 5.5 percent, 8 percent on meals and liquor. MARYLAND Those over 65 or permanently disabled, or who have a spouse who is permanently disabled, may under certain conditions be eligible for Maryland’s maximum pension exclusion of $27,100. Also, all individuals 65 years or older are entitled to an extra $1,000 personal exemption in addition to the regular $3,200 personal exemption available to all taxpayers. Social Security is exempt. See the worksheet and instructions in the Maryland Resident Tax Booklet. General sales tax is 6 percent, 9 percent on liquor. MASSACHUSETTS Distributions made to a retiree from a federal employee contributory plan are excluded from Massachusetts gross income. Social Security is not included in Massachusetts gross income. Each taxpayer over age 65 is allowed an additional $700 exemption on other income. Sales tax is 6.25 percent.