The Foreign Service Journal, January-February 2021

82 JANUARY-FEBRUARY 2021 | THE FOREIGN SERVICE JOURNAL AFSA NEWS MISSOURI Up to 65 percent of pub- lic pension income may be deducted if Missouri Adjusted Gross Income is less than $100,000 when married filing jointly or $85,000 for single filers, up to a limit of $36,976 for each spouse. The maximum private pension deduction is $6,000. You may also deduct 100 percent of Social Secu- rity income if over age 62 and Federal Adjusted Gross Income is less than the limits above. Sales tax is 4.225 per- cent; local sales and use tax additions may raise the total to 10.1 percent. MONTANA Montana taxes all pension and retirement income received while residing in Montana. Those over 65 can exempt an additional $800 of interest income for single taxpayers and $1,600 for married joint filers. For taxpayers with an AGI income under $25,000 (single filers) or $32,000 (joint filers), all Social Security retirement income is deductible. For tax- payers above those limits but below $34,000 (single filers) or $44,000 (joint filers), half of Social Security retirement income is deductible. Above those second-level limits, 15 percent is deductible. Mon- tana has no general sales tax, but tax is levied on the sale of various commodities. NEBRASKA U.S. government pensions and annuities are fully taxable. Social Security is taxable. State sales tax is 5.5 percent; local taxes can drive that rate as high as 8 percent. NEVADA No personal income tax. Sales and use tax varies from 6.85 to 8.1 percent, depend- ing on local jurisdiction. NEW HAMPSHIRE No personal income tax. There is no inheritance tax. There is a 5 percent tax on interest/dividend income over $2,400 for singles ($4,800 married filing jointly). A $1,200 exemption is available for those 65 or over. No general sales tax. Several services (prepared food, hotel rooms, etc.) are taxed at 9 percent. NEW JERSEY Pensions and annuities from civilian government service are subject to state income tax, with exemptions for those age 62 or older, or totally and permanently disabled. See this link, however, for the distinction between the “Three-year method” and the “General Rule method” for contribu- tory pension plans: http:// www.state.nj.us/treasury/ taxation/njit6.shtml. For 2020, qualifying singles and heads of households may be able to exclude up to $75,000 of retirement income; those married filing jointly up to $100,000; those married filing separately up to $50,000 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 excluded from taxable income. State sales tax is 6.625 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 exemp- tion is reduced as income increases, disappearing altogether at $51,000. State tax rate is 5.125 percent. Local taxes combined with state sales tax can be as high as just over 9 percent. NEW YORK Social Security, U.S. govern- ment pensions and annui- ties are not taxed. For those over age 59 and a half, up to $20,000 of other annuity income (e.g., Thrift Savings Plan) may be excluded. See N.Y. Tax Publication 36 at https://www.tax.ny.gov/pdf/ publications/income/pub36. pdf for details. Sales tax is 4 percent statewide. Other local taxes may add up to an additional 4.875 percent. NORTH CAROLINA Pursuant to the “Bailey” deci- sion (see http://dornc.com/ taxes/individual/benefits. html), government retire- ment benefits received by federal retirees who had five years of creditable 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 ser- vice on Aug. 12, 1989, must pay North Carolina tax on their federal annuities. For those over 65, an extra $750 (single) or $1,200 (couple) may be deducted. Social Security is excluded from taxable income. State sales tax is 4.75 percent; local taxes may increase this by up to 2.75 percent. NORTH DAKOTA All pensions and annuities are taxed. Taxpayers can exclude $5,000 of pension income from Civil Service, and some other qualified, plans. Social Security is excluded from taxable income. General sales tax is 5 percent; local jurisdictions impose up to 3.5 percent more. OHIO Retirement income is taxed. Taxpayers age 65 and over may take a $50 credit per return. In addition, Ohio gives a tax credit based on the amount of the retire- ment income included in Ohio Adjusted Gross Income, reaching a maxi- mum of $200 for any retire- ment income over $8,000. Social Security is excluded from taxable income. State sales tax is 5.75 percent. Counties and regional tran- sit authorities may add to this, but the total must not exceed 8.75 percent.