The Foreign Service Journal, February 2003

FEBRUARY 2003 • AFSA NEWS 13 98504-7450. Phone: (360) 786-6100 or 1 (800) 647-7706. Web site: www.dor.wa.gov WEST VIRGINIA: No tax liability for out- of-state income if the individual has noper- manent residence inWestVirginia, has aper- manent residence elsewhere, and spends no more than 30 days of the tax year in West Virginia. Filing a return is not required, but it is recommended topreserve domicile sta- tus. Filing is required on Form IT-140-NR for all income derived fromWest Virginia sources. Tax rates range from 3 to 6.5 per- cent depending on income and filing status. Write: TheDepartment of TaxandRevenue, Taxpayer Services Division, P.O. Box 3784, Charleston,WV25337-3784. Phone: (304) 558-3333 or 1 (800) 982-8297. Web site: www.state.wv.us/taxdiv WISCONSIN: Individuals domiciled in Wisconsin are considered residents and are subject to tax on their entire income regard- less of where the income is earned. Wisconsin’s current tax rate ranges from4.6 to 6.75 percent depending on income and filing status. Write: Wisconsin Department ofRevenue,Customer Service andEducation Bureau, P.O. Box 8949, Madison, WI 53708-8949. Phone: (608) 266-2772. Web site: www.dor.state.wi.us WYOMING: No state income tax. No tax on intangibles such as bank accounts, stocks or bonds. Address: Wyoming Dept. of Revenue,Herschler Building, 122West 25th St.,Cheyenne,WY82002-0110. Phone: (307) 777-7961. E-mail: dor@state.wy.us. Web site: revenue.state.wy.us State Pension & Annuity Tax The laws regarding the taxation of Foreign Service annuities vary greatly from state to state. In addition to those states that have no income tax or no tax on personal income, there are several states that do not tax incomederived frompensions andannu- ities. For example, Idaho taxesForeignService annuities while exempting certain portions of those of the Civil Service. ALABAMA: Full exemption. Federal pen- sions are not taxable. ALASKA: No personal income tax. ARIZONA: Up to $2,500 of U.S. govern- ment pension income may be excluded for each taxpayer. ARKANSAS: Up to $6,000 exempt. CALIFORNIA: Fully taxable. COLORADO: Up to$24,000exempt if over age 65or over.Up to$20,000 exempt if aged between 55 and 64. CONNECTICUT: Fully taxable for residents. DELAWARE: Two exclusions: (1) Up to $2,000 exempt if earned income is less than $2,500 and Adjusted Gross Income is less than$10,000; ifmarriedand filing jointly, up to$4,000exempt if earned income is less than $5,000 and AGI is under $20,000. This is applicable if 60 years or older or totally dis- abled. (2) If under age 60, the amount of the exclusion is $2,000or the amount of thepen- sion (whichever is less) and for age 60 or older, the amount of the exclusion is $12,500 or the amount of the pension and eligible retirement income (whichever is less). The combined total of pensionandERImay not exceed $12,500 per person age 60 or older. DISTRICT OF COLUMBIA: Pension or annuity exclusion of $3,000 if 62 years or older. FLORIDA: No personal income, inheri- tance, or gift tax, but Florida has an “Intangibles Tax.” GEORGIA: Up to$14,500exempt for those 62 years or older or permanently and total- ly disabled for the 2002 tax year, rising to $15,000 for the 2003 tax year. HAWAII: Government-funded portion not taxed; employee-funded portion taxed at standard rates. IDAHO: Foreign Service retirees whose annuities are paid from the FSPS are fully taxedontheirpensions.Thosepersonsretired under the Civil Service Retirement Act are exempt up to$19,920 for a single returnand up to $29,880 if filing jointly. Up to $19,920 is exempt for unmarried survivor of annui- tant. Must be 65 years or older, or 62 years or older anddisabled. Amount reduceddol- lar for dollar by social security benefits. ILLINOIS: Full exemption; U.S. govern- ment pensions are not taxed. INDIANA: Up to $2,000 exemption for most 62 or older, reduced dollar for dollar by Social Security benefits. IOWA: Fully taxable. However, there is apension/retirement income exclusionof up to $6,000 for individual and up to $12,000 formarried taxpayerswhoaredisabledor are 55 years of age or older, or are a surviving spouseorother survivorof theannuitant.The same income tax rates apply to annuities as other incomes. KANSAS: Full exemption; government pensions are not taxed. KENTUCKY: Government pensions attrib- utable to service before Jan. 1, 1998, are not taxed. In the future, the portion of annuity income attributable to service after Dec. 31, 1997, will be taxed at the appropriate rate, but is eligible for the pensionexclusionof up to$38,775 in2002(up from$37,500 in2001). LOUISIANA: Up to $6,000 exempt if 65 yearsorolder. ($12,000 if both filers areannu- itants over 65). MAINE: Recipientsof agovernment-spon- sored pension or annuity are deductible up to$6,000on income that is included in their federalAGI, reducedby all social security and railroad benefits. MARYLAND: For individuals 65 years or older or permanently disabled, or if their spouse is permanently disabled, all pensions may be excluded up to a maximum of $18,500under certain conditions. Eligibility determination is required. Social Security is not taxed. See theworksheet and instructions for Maryland, Form 502. MASSACHUSETTS: Full exemption; U.S. government contributory pensions are not taxed. MICHIGAN: Federal government pensions may be deducted from Michigan taxable income to the extent included in federal AGI. Retirement benefits fromprivate sourcesmay be deducted to a maximum of $37,110 for a single filer or $74,220 for joint filers for the 2002 tax year. Thismaximumis reducedby thededuction taken for the government pen- sion. MINNESOTA: Certain persons over 65 with incomes under $42,000 may be eligi- ble for a subtraction. The maximum sub- traction is $12,000married joint and $6,000 single, which is reduced dollar for dollar by untaxed Social Security benefits, andby one dollar for each two dollars of income over $18,000 for married and $14,500 for single. The marriage credit also applies to annuity and pension recipients. MISSISSIPPI: Full exemption, U.S. gov- ernment pensions are not taxed. MISSOURI: Up to $6,000 exempt if the pension income is less than $32,000 when married filing jointly, $16,000 ifmarried fil- ing separately, or $25,000 for a single or head of household filer. MONTANA: Up to$3,600pension income exclusion if federal adjusted gross income is less than$30,000. Pension income exclusion reduced for income levels above $30,000. If federal adjustedgross income is greater than $31,800 for single taxpayer or $33,600 ifmar- ried filing a joint return and both spouses have pension income, then no exclusion. NEBRASKA: Fully taxable. NEVADA: No personal income tax. NEWHAMPSHIRE: No personal income tax; federal pensions are not taxed. NEW JERSEY: Pensions and annuities fromciviliangovernment service are subject to state income taxwithexemptions for those who are age 62 or older, or totally and per- manently disabled. Singles and heads of