The Foreign Service Journal, January-February 2023

THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2023 81 annual retirement income received by any person age 65 or over. Married filing jointly may exclude $12,000. Social Security is excluded from taxable income. State sales tax is 4.45 percent with local additions up to a pos- sible total of 7 percent. Use tax is 8 percent regardless of the purchaser’s location. MAINE Recipients of a government- sponsored pension or annuity who are filing singly may deduct up to $10,000 ($25,000 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 $1,600 (filing singly) or $2,600 (married filing jointly). Sales tax is 5.5 percent. MARYLAND Those over 65 or perma- nently disabled, or who have a totally disabled spouse, can exclude up to $34,300 income from a pension or 401(k). 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 excluded from taxable income. See the worksheet and instructions in the Mary- land Resident Tax Booklet. General sales tax is 6 percent. MASSACHUSETTS Federal pensions and Social Security are excluded from Massachusetts gross income. Each taxpayer over age 65 is allowed an additional $700 exemption on other income. Sales tax is 6.25 percent. MICHIGAN Federal and state/local government pensions may be partially exempt, based on the year you were born and the source of the pension. (a) If born before 1946, pri- vate pension or IRA benefits included in AGI are partially exempt; public pensions are exempt. (b) If born after 1946 and before 1952, the exemption for public and private pen- sions is limited to $20,000 for singles and $40,000 for married filers. (c) If born after 1952, you are not eligible for any exemption until reaching age 67. Taxpayers have two options when they turn 67 years old: either deduct $20,000 from all income sources ($40,000 for joint filers) or claim per- sonal exemptions and deduct Social Security, military, and railroad retirement income. Social Security is excluded from taxable income. Full details are at https://www. michigan.gov/taxes/iit/ pension/2021-retirement- pension-information#1. Michigan’s state sales tax rate is 6 percent. There are no city, local, or county sales taxes. MINNESOTA Social Security income is taxed by Minnesota to the same extent it is on your federal return, unless it’s your only source of income. All federal pensions are taxable, but single taxpayers who are over age 65 or disabled may exclude some income if Federal Adjusted Gross Income is under $33,700 and nontaxable Social Security is under $9,600. For a couple who are both over age 65, the limits are $42,000 for Federal Adjusted Gross Income and $12,000 for nontaxable Social Security. Statewide sales and use tax is 6.875 percent; a few cities and counties also add a sales tax, which can be as high as 8.375 percent. MISSISSIPPI Social Security, qualified retirement income from federal, state, and private retirement systems, and income from IRAs are exempt fromMississippi tax. There is an additional exemption of $1,500 on other income if over age 65. Statewide sales tax is 7 percent. MISSOURI Missouri taxes all retirement income, including Social Security. Up to 65 percent of public 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 $39,014 for each spouse. The maximum private pension deduction is $6,000. You may also deduct 100 percent of Social Security income if over age 62 and Federal Adjusted Gross Income is less than the limits above. Sales tax is 4.23 percent; 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 age 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 but single filers with $43,000 in AGI or less ($58,000 married filing jointly) may subtract their Social Security income. State sales tax is 5.5 percent; local taxes may add another 2.5 percent. NEVADA No personal income tax. Sales and use tax varies from