The Foreign Service Journal, February 2005

12 AFSA NEWS • FEBRUARY 2005 T heDecember terrorist attack onU.S. ConsulateGeneral Jeddah in Saudi Arabia once again highlighted the role locally engaged staff play in our mission and the price they pay for doing so. This attack cost four Foreign Service Nationals their lives. Seven others were wounded. The news brought back memories of the August 1998 attack on our embassies in Dar es Salaam and Nairobi, and the 1983 and 1984 bombings of Embassy Beirut and its annex. These attacks killed 68 FSNs, plus others who worked for the U.S. government as members of the local guard force and as contractors. How are the families of these FSNs compensated? There is an interesting story here, probably unknown to most readers. FSN victims of terrorism can be com- pensated as though they were direct-hire Americans. Their cases are adjudicated by the Office of Workmen’s Compensation at the Department of Labor. This is the same office which handles U.S. federal workers’ claims. There is a lot of paper- work required to substantiate a claim—birth certificates, marriage certificates, death certificates, etc. The State Department Office of Casualty Assistance shepherded the cases of FSNs killed in the Dar es Salaam and Nairobi blasts through the system. The Department of Labor’s decision on whether or not to accept these cases was slowed because of the issue of multiple spouses. (As you can imagine, the law gov- erning compensation to federal employees killed on duty did not anticipate claims from multiple spouses.) Once a claim is adjudicated, the Department of Labor decides whether or not to accept it. If the decision is between the U.S. compensation level or that of the other country, the department is likely to rule in favor of the local compensation scheme if it is less costly to the U.S. government, except if the FBI certifies that the deaths occurred as the result of an act of terrorism. If so, then the employees’ fam- ilies will be compensated in the same way as the family of aU.S. citizen federal employ- ee. The argument is that the U.S. was the target and clearly, the locally engaged staff died because they worked for us. We are the target; they are the collateral damage. Since 1983, terrorist attacks have killed andwoundedmore FSNs, not including con- tractors, than American Foreign Service employees as the result of working for the target, the United States. I urge you to donate to the department’s FSNCompensation Fund. The depart- ment recently issued a plea for funds to assist the families of those affected by the attack on Consulate General Jeddah. The fund needs replenishment. The funds are not reserved solely for those killed or injured by terrorist bombings. When Hurricane Mitch slammed into Central America in October 1998 and El Salvador was struck by an earthquake in 2001, the fund helped out those employees whose homes had been demolished. The department’s gift coordinator is Donna Bordley, reachable by e-mail: bordleyds@state.gov. H er office fax is (202) 647-8194. She can forward the depart- ment’s recent notice about replenishing the fund to you via e-mail or fax. Department employees can, of course, view it on the department’s Intranet web site. Your con- tributions are fully tax deductible. You canmake themvia payroll deduction, check or credit card. Your contribution is one measure of our appreciation for these employees’ loy- alty and dedication and for the risks they take in working for us. ▫ V.P. VOICE: STATE n BY LOUISE CRANE LES is More: Support Our FSNs erally, are fully taxed as part of Federal Adjusted Gross Income. NEW YORK: Full exemption; U.S. gov- ernment pensions and annuities are not taxed. NORTH CAROLINA: Pursuant to the “Bailey” decision, government retirement benefits receivedby federal retireeswhohad 5yearsof creditable service ina federal retire- ment systemas ofAug. 12, 1989, are exempt fromNorthCarolinaincometax. Thosewho donot have five yearsof creditable serviceon Aug. 12, 1989,must payNorthCarolina tax on their federal annuities. Up to $4,000 of any federal annuity income is exempt. NORTH DAKOTA: All pensions and annuities are fully taxed, except first $5,000, which is exempt less any Social Security payments, but only if the indi- vidual chooses to use FormND-2 (option- al method). Individuals are cautioned to check both Form ND-1 and Form ND-2 to ascertainwhich one yields the lowest tax for the year. Qualifying for the exclusion does not mean that FormND-2 is the bet- ter form to choose. OHIO: Taxpayers 65 and overmay take a $50 credit per return. In addition, Ohio gives a tax credit based on the amount of the retirement income included in Ohio Adjusted Gross Income, reaching a max- imum of $200 for any retirement income over $8,000. OKLAHOMA: Up to $5,500 exempt on all federal pensions. OREGON: Generally, all retirement income is subject to Oregon tax when receivedbyanOregonresident. Thisincludes non-Oregon source retirement income. However, federal retirees who retired on or before Oct. 1, 1991, may exempt all of their federal pension; those who worked both before andafter that datemust prorate their exemption using the instructions in the tax booklet. Oregon-source retirement income receivedbynon-residentswhoarenotdomi- ciled inOregon is not subject to taxation by Oregon. PENNSYLVANIA: Governmentpensions andsocial securityarenot subject topersonal income tax. PUERTO RICO: The first $8,000 of income received froma federal pension can