The Foreign Service Journal, February 2011

70 F O R E I G N S E R V I C E J O U R N A L / F E B R U A R Y 2 0 1 1 Gross Income, reaching a maximumof $200 for any retirement income over $8,000. So- cial Security is exempt. State sales tax is 5.5 percent. Counties and regional transit au- thorities may add to this, but the total must not exceed 8.5 percent. OKLAHOMA: Individuals receiving FERS/FSPS or private pensions may exempt up to $10,000 if the Federal Adjusted Gross Income is under $100,000 for single filers or $200,000 for married filing jointly. Alterna- tively, in 2010, 80 percent of a federal pen- sion paid in lieu of Social Security (i.e., CSRS and FSRDS — “old system” — in- cluding the CSRS/FSRDS portion of an an- nuity paid under both systems) is exempt. This figure will rise to 100 percent in 2011. Social Security included in FAGI is exempt. State sales tax is 4.5 percent. Local and other additions may bring the total up to 9.5 per- cent. OREGON: Generally, all retirement in- come is subject to Oregon tax when received by an Oregon resident. However, federal re- tirees who retired on or before Oct. 1, 1991, may exempt their entire federal pension; those who worked both before and after Oct. 1, 1991, must prorate their exemption using the instructions in the tax booklet. A tax credit of up to 9 percent of taxable pension income is available to recipients of pension income, including most private pension in- come, whose household income was less than $22,500 (single) and $45,000 (joint), and who received less than $7,500 (single)/ $15,000 (joint) in Social Security benefits. The credit is the lesser of the tax liability or 9 percent of taxable pension income. Oregon does not tax Social Security benefits. Oregon has no sales tax. PENNSYLVANIA: Government pen- sions and Social Security are not subject to personal income tax. Pennsylvania sales tax is 6 percent. Other taxing entities may add up to 2 percent. PUERTO RICO: For 2009, the first $11,000 of income received from a federal pension could be excluded for individuals under 60. For those over 60 the exclusionwas $15,000. Figures for 2010 were not yet avail- able at press time. If the individual receives more than one federal pension, the exclu- sion applies to each pension or annuity sep- arately. Social Security is not taxed. RHODE ISLAND: U.S. government pensions and annuities are fully taxable. Sales tax is 7 percent. SOUTH CAROLINA: Individuals under age 65 can claima $3,000 deduction on qual- ified retirement income; those 65 years of age or over can claim a $10,000 deduction on qualified retirement income. A resident of South Carolina who is 65 years or older may claim a $15,000 deduction against any type of income ($30,000 if both spouses are over 65), but must reduce this figure by any re- tirement deduction claimed. Social Security is not taxed. Sales tax is 6 percent plus 2 per- cent in some counties. Seniors 85 and over pay 4 percent. SOUTH DAKOTA: No personal income tax or inheritance tax. State sales and use tax is 4 percent; municipalities may add up to an additional 2 percent. TENNESSEE: Social Security, pension income and income from IRAs and TSP are not subject to personal income tax. Most in- terest and dividend income is taxed at 6 per- cent if over $1,250 (single filers) or $2,500 (married filing jointly). However, those over 65 with total income of less than $16,200 for a single filer and $27,000 for joint filers are exempt. State sales tax is 7 percent with be- tween 1.5 and 2.75 percent added, depend- ing on jurisdiction. TEXAS: No personal income tax or in- heritance tax. State sales tax is 6.25 percent. Local options can raise the rate to 8.25 per- cent. UTAH: In 2008, Utah instituted a flat tax rate of 5 percent of all income. The previous retirement income exclusion has been re- placed for taxpayers over 65, by a retirement tax credit of $450 for single filers and $900 for joint filers. This is reduced by 2.5 percent of income exceeding $25,000 for single filers and $32,000 for joint filers. See the stateWeb site for details. State sales tax is 4.7 percent; local option taxes may raise the total to 7.95 percent. VERMONT: U.S. government pensions and annuities are fully taxable. 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 $12,000 de- duction is reduced by one dollar for each dol- lar by which Adjusted Gross Income exceeds $50,000 for single, and $75,000 for married, taxpayers. All taxpayers over 65 receive an additional personal exemption of $800. So- cial Security income is exempt. The estate tax was repealed for all deaths after July 1, 2007. The general sales tax rate is 5 percent (4 per- cent state tax and 1 percent local tax). WASHINGTON: No personal income tax. State sales tax was 6.5 percent in the last quarter of 2009; rates are updated quarterly. Local taxes may increase the total to 9.5 per- cent. WEST VIRGINIA: $2,000 of any civil or state pension is exempt. Social Security in- come is taxable only to the extent that the in- come is includable in Federal AdjustedGross Income. Taxpayers 65 and older or surviving 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 the $8,000 exemption. WISCONSIN: Pensions and annuities are fully taxable. 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 taxable. Since Tax Year 2008, Wisconsin has not taxed Social Security ben- efits included in Federal Adjusted Gross In- come. For tax years after 2009, those over 65 and with an FAGI of less than $15,000 (sin- gle filers) or $30,000 (joint filers) may take a $5,000 deduction on income from federal re- tirement systems or IRAs. State sales tax is 5 percent; most counties charge an extra 0.5 percent. WYOMING: No personal income tax. State sales tax is 4 percent. Local taxes may increase the total to 6 percent. The AFSA Tax Guide is also available online at www.afsa.org/news. A F S A N E W S