The Foreign Service Journal, January-February 2014

THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2014 81 AFSA NEWS 2013 AFSA TAX GUIDE who are age 62 or older or totally and permanently disabled. Singles and heads of households can exclude up to $15,000 of retirement income; those married filing jointly up to $20,000; those married filing separately up to $10,000 each. These exclusions are eliminated for New Jersey gross incomes over $100,000. Residents over 65 may be eligible for an additional $1,000 personal exemption. Social Security is not taxed. State sales tax is 7 percent. NEW MEXICO All pensions and annuities are taxed as part of Federal Adjusted Gross Income. Taxpayers 65 and older may exempt up to $8,000 (single) or $16,000 (joint) from any income source if their income is under $28,500 (individual filers) or $51,000 (married filing jointly). The exemption is reduced as income increases, disappearing altogether at $51,000. New Mexico has a gross receipts tax, instead of a sales tax, of 5.1375 percent; county and city taxes may raise this to 8.6875 percent in some jurisdictions. NEWYORK Social Security, U.S. government pensions and annuities are not taxed. For those over age 59½, up to $20,000 of other annuity income (e.g., Thrift Savings Plan) may be excluded. See N.Y. Tax Publication 36 for details. Sales tax is 4 percent statewide. Other local taxes may add up to an additional 4.75 percent. NORTH CAROLINA Pursuant to the “Bailey” decision, government retirement ben- efits received by federal retirees who had five years of credit- able service in a federal retirement system on Aug. 12, 1989, are exempt from North Carolina income tax. Those who do not have five years of creditable service on Aug. 12, 1989, must pay North Carolina tax on their federal annuities. In this case, up to $4,000 ($8,000 if filing jointly) of any federal annuity income is exempt, as is up to $2,000 of other pension income. For those over 65, an extra $750 (single) or $1,200 (couple) may be deducted. Social Security is exempt. State sales tax is 4.75 percent; local taxes may increase this by up to 3 percent. NORTH DAKOTA All pensions and annuities are fully taxed, except for the first $5,000, which is exempt minus any Social Security payments. General sales tax is 5 percent, 7 percent on liquor. Local juris- dictions impose up to 3 percent more. OHIO Taxpayers 65 and over may take a $50 credit per return. In addition, Ohio gives a tax credit based on the amount of the retirement income included in Ohio Adjusted Gross Income, reaching a maximum of $200 for any retirement income over $8,000. Social Security is exempt. State sales tax is 5.75 percent. Counties and regional transit authorities may add to this, but the total must not exceed 8.75 percent. OKLAHOMA Individuals receiving FERS/FSPS or private pensions may exempt up to $10,000 if the Federal Adjusted Gross Income is under $100,000 for single filers or $200,000 for married filing jointly. Alternatively, beginning in 2011, 100 percent of a federal pension paid in lieu of Social Security (i.e., CSRS and FSRDS—”old system”—including the CSRS/FSRDS portion of an annuity paid under both systems) is exempt. Social Security included in FAGI is exempt. State sales tax is 4.5 percent. Local and other additions may bring the total up to 9.5 percent. OREGON Generally, all retirement income is subject to Oregon tax when received by an Oregon resident. However, federal retirees who retired on or before Oct. 1, 1991, may exempt their entire federal pension; those who worked both before and after Oct. 1, 1991, must prorate their exemption using the instructions in the tax booklet. A tax credit of up to 9 percent of taxable pension income is available to recipients of pension income, including most private pension income, whose household income was less than $22,500 (single) and $45,000 (joint),and who received less than $7,500 (single)/$15,000 (joint) in Social Security benefits. The credit is the lesser of the tax liability or 9 percent of taxable pension income. Oregon does not tax Social Security benefits. Oregon has no sales tax. PENNSYLVANIA Government pensions and Social Security are not subject to personal income tax. Pennsylvania sales tax is 6 percent. Other taxing entities may add up to 2 percent. PUERTO RICO The first $11,000 of income received from a federal pension can be excluded for individuals under 60. For those over 60, the exclusion is $15,000. If the individual receives more than one federal pension, the exclusion applies to each pension or annuity separately. Social Security is not taxed. RHODE ISLAND U.S. government pensions and annuities are fully taxable. Sales tax is 7 percent.