THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2024 71 Circular 230 Notice: Pursuant to U.S. Treasury Department Regulations, all tax advice herein is neither intended nor written to be used, and may not be used, for the purposes of avoiding tax-related penalties under the Internal Revenue Code or promoting, marketing, or recommending advice on any tax-related matters. 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. 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. For taxpayers with an AGI income under $25,000 (single filers) or $32,000 (joint filers), all Social Security retirement income is deductible. For taxpayers above those limits but below $40,980 (single filers) or $43,300 (joint filers), half of Social Security retirement income is deductible. Those over 65 can exempt an additional $800 of interest income for single taxpayers and $1,600 for married joint filers. Above those secondlevel limits, 15 percent is deductible. Montana 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. Various deductions are available for those over age 62, and for those over 65 and/ or blind. State sales tax is 5.5 percent; local taxes may add another 2.5 percent. NEVADA No personal income tax. Retirement income is not taxed. Sales and use tax varies from 6.85 to 8.1 percent, depending on local jurisdiction. NEW HAMPSHIRE No personal income tax. No inheritance tax. In 2023 the 5 percent tax on interest/dividend income over $2,400 for singles ($4,800 married filing jointly) is 5 percent. A $1,200 exemption is available for those age 65 or over. No general sales tax. Several services (prepared food, hotel rooms, etc.) are taxed at 9 percent. NEW JERSEY Social Security is excluded from taxable income. 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. However, see this link for the distinction between the “three-year method” and the “general rule method” for contributory pension plans: https://state. nj.us/treasury/taxation/njit6. shtml. Taxpayers age 62 or older with $100,000 or less in state income can exclude up to $60,000 of pension, annuity, IRA, or other retirement plan income. Joint filers can exclude up to $150,000 ($50,000 for married filing separately and $75,000 for single filers). These exclusions are eliminated for New Jersey gross incomes over $100,000. Residents over age 65 may be eligible for an additional $1,000 personal exemption. State sales tax is 6.63 percent. NEW MEXICO All pensions and annuities are taxed as part of Federal Adjusted Gross Income, but single filers with less than $100,000 in income, joint filers with under $150,000 in income, and married filing separately with under $75,000 in income are not taxed on their Social Security income. Taxpayers age 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. The 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. 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 at https:// https://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 Social Security is excluded from taxable income. All other forms of retirement income are taxed. However, pursuant to the “Bailey” decision (see https://dornc.com/ taxes/individual/benefits. html), government retirement 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. State sales tax is 4.75 percent; local taxes may increase this by up to 2.75 percent. NORTH DAKOTA Social Security is excluded from taxable income. All other pensions and annuities are taxed. Taxpayers can exclude $5,000 of pension income from Civil Service and some other qualified plans. General sales tax is 5 percent; local jurisdictions impose up to 3.5 percent more.
RkJQdWJsaXNoZXIy ODIyMDU=