The Foreign Service Journal, January-February 2021

84 JANUARY-FEBRUARY 2021 | THE FOREIGN SERVICE JOURNAL AFSA NEWS income; those age 65 or over may claim a $15,000 deduction on qualified retire- ment income ($30,000 if both spouses are over 65), but must reduce this figure by any other retirement deduction claimed. Social Security is excluded from taxable income. Sales tax is 6 percent plus up to 3 percent in some counties. Residents age 85 and over pay 5 percent. SOUTH DAKOTA No personal income tax or inheritance tax. State sales and use tax is 4.5 percent; municipalities may add up to an additional 2.75 percent. Residents age 66 and older and have an annual income under $12,670 (single) or total household income under $17,200 are eligible for a sales tax refund. TENNESSEE Social Security, pension income and income from IRAs and TSP are not subject to personal income tax. In 2020 most interest and divi- dend income is taxed at 1 percent if over $1,250 (sin- gle filers) or $2,500 (married filing jointly). However, for tax year 2015 and subsequently, those over 65 with total income from all sources of less than $37,000 for a single filer and $68,000 for joint filers are completely exempt from all taxes on income. State sales tax is 5 percent on food; 7 percent on other goods, with between 1.5 and 2.75 percent added, depend- ing on jurisdiction. TEXAS No personal income tax or inheritance tax. State sales tax is 6.25 percent. Local options can raise the rate to 8.25 percent. UTAH Utah has a flat tax rate of 4.95 percent of all income. For taxpayers over 65, there is a retirement tax credit of $450 for single filers and $900 for joint filers. Qualify- ing modified adjusted gross income levels are under $43,000 for single residents and less than $50,000 for joint filers. Married taxpay- ers who file separate returns are eligible with a modified AGI under $34,000. See the state website for details. State sales tax ranges from 5.95 percent to 8.60 percent, depending on local jurisdiction. VERMONT U.S. government pensions and annuities are fully taxable. Social Security benefits are taxed for single filer income greater than $45,000 annually or over $60,000 for joint filers. Out- of-state government pen- sions and other retirement income are taxed at rates from 3.35 percent to 8.75 percent. State general sales tax is 6 percent; local option taxes may raise the total to 7 percent (higher on some commodities). VIRGINIA Individuals over age 65 can take a $12,000 deduction. The maximum $12,000 deduction is reduced by one dollar for each dollar by which Adjusted Gross Income exceeds $50,000 for single, and $75,000 for mar- ried, taxpayers. All taxpayers over 65 receive an additional personal exemption of $800. Social Security is excluded from taxable income. The estate tax was repealed for all deaths after July 1, 2007. The general sales tax rate is 5.3 percent (4.3 percent state tax and 1 percent local tax, with an extra 0.7 percent in Northern Virginia). WASHINGTON No personal income tax. Retirement income is not taxed. State sales tax is 7 percent; rates are updated quarterly. Local taxes may increase the total to as much as 20.5 percent. WEST VIRGINIA $2,000 of any civil or state pension is exempt. West Virginia taxes Social Secu- rity benefits to the extent they are taxed at the federal level. However, this tax is being phased out over three years. In 2020, 35 percent of Social Security benefits will be exempt. In 2021 the exemption will rise to 65 percent, then the tax will be eliminated by 2022. Taxpay- ers 65 and older or surviv- ing spouses of any age may exclude the first $8,000 (individual filers) or $16,000 (married filing jointly) of any retirement income. Out-of- state government pensions qualify for this exemption. State sales tax is 6 percent, with additions of between 0.5 and 1 percent in some jurisdictions. WISCONSIN Pensions and annuities are fully taxable. Social Security is excluded from taxable income. Those age 65 or over may take two personal deductions totaling $950. Benefits received from a federal retirement system account established before Dec. 31, 1963, are not tax- able. Those over 65 and with a FAGI of less than $15,000 (single filers) or $30,000 (joint filers) may exclude $5,000 of income from federal retirement systems or IRAs. Those over 65 may take an additional personal deduction of $250. State sales tax is 5 percent; local taxes may raise this rate up to 5.6 percent. WYOMING No personal income tax. State sales tax is 4 percent. Local taxes may add up to 2 percent on sales and 4 percent on lodging. n