The Foreign Service Journal, February 2012

F E B R U A R Y 2 0 1 2 / F O R E I G N S E R V I C E J O U R N A L 47 in some jurisdictions. INDIANA: If the individual is over age 62, the Adjusted Gross Income may be reduced by the first $2,000 of any pension, reduced dollar for dollar by So- cial Security benefits. There is also a $1,000 exemption if over 65, or $1,500 if Federal Adjusted Gross Income is less than $40,000. There is no pension ex- clusion for survivor annuitants of fed- eral annuities. Social Security is not taxed in Indiana. Sales tax and use tax in Indiana is 7 percent. IOWA: Generally taxable. For 2009 and later tax years, however, a married couple with an income for the year of less than $32,000may file for exemption, if at least one spouse or the head of household is 65 years or older on Dec. 31, and single persons who are 65 years or older on Dec. 31 may file for an ex- emption if their income is $24,000 or less. Over age 55, there is a pension/re- tirement income exclusion of up to $6,000 for single, head of household or qualifying widower filers and up to $12,000 for married filing jointly. The same income tax rates apply to annuities as to other incomes. Iowa is phasing out taxation of Social Security benefits, but a portion is still subject to tax in 2011. Statewide sales tax is 6 percent, with no more than 1 percent added in local ju- risdictions. KANSAS: U.S. government pensions are not taxed. Social Security is exempt if Federal Adjusted Gross Income is under $75,000. State sales tax is 6.3 per- cent, with additions of between 1 and 4 percent depending on jurisdiction. KENTUCKY: Government pension income is exempt if retired before Jan. 1, 1998. If retired after Dec. 31, 1997, pen- sion/annuity income up to $41,110 re- mains fully excludable for 2011. Social Security is exempt. Sales and use tax is 6 percent statewide, with no local sales or use taxes. LOUISIANA: Federal retirement benefits are exempt fromLouisiana state income tax. There is an exemption of $6,000 of other annual retirement in- come received by any person age 65 or over. Married filing jointly may exclude $12,000. State sales tax is 4 percent with local additions up to a possible total of 10.75 percent. Use tax is 8 percent re- gardless of the purchaser’s location. MAINE: Recipients of a government sponsored pension or annuity who are filing singly may deduct up to $6,000 ($12,000 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 addi- tional standard deduction of $1,400 (single), $1,100 (married filing singly) or $2,200 (married filing jointly). General sales tax is 5 percent. MARYLAND: Those over 65 or per- manently disabled, or who have a spouse who is permanently disabled,may under certain conditions be eligible for Mary- land’s maximum pension exclusion of $26,100. Also, all individuals 65 years or older are entitled to an extra $1,000 per- sonal exemption in addition to the reg- ular $3,200 personal exemption available to all taxpayers. Social Security is ex- empt. See the worksheet and instruc- tions in the Maryland Resident Tax Booklet. Maryland sales tax is 6 percent. MASSACHUSETTS: Distributions made to a retiree from a federal em- ployee contributory plan are excluded from Massachusetts gross income. So- cial Security is not included in Massa- chusetts gross income. Each taxpayer over age 65 is allowed a $700 exemption on other income. Sales tax is 6.25 per- cent. MICHIGAN: In 2011, federal govern- ment pensions remain exempt from tax- ation in Michigan. For Tax Year 2012, there will be changes for those born after 1946, and greater changes for those born after 1952. Details at: www.michigan. gov/treasury. In 2011, pension benefits included inAdjustedGross Income from a private pension system or an IRA are deductible to amaximumof $45,120 for a single filer, or $90,240 for joint filers. This maximum is reduced by the de- duction taken for the government pen- sion. Those age 65 or over may also be able to deduct part of their interest, div- idends or capital gains included in the AGI up to $10,058 for single filers and to $20,115 for joint filers. Michigan has no city, local or county sales tax. The state sales tax rate is 6 percent. MINNESOTA: Generally all pensions are taxable, but single taxpayers who are over 65 or disabled may exclude some income if Federal Adjusted Gross In- come is under $33,700 and non-taxable Social Security is under $9,600. For a couple, the limits are $42,000 for Ad- justed Gross Income and $12,000 for non-taxable Social Security. Statewide sales and use tax is 6.875 percent; some local additions may increase the total to 9.53 per cent. MISSISSIPPI: Social Security and qualified retirement income from fed- eral, state and private retirement systems are exempt fromMississippi tax. There is an additional exemption of $1,500 on other income if over 65. Statewide sales tax is 7 percent; local additions may add another 3 percent. MISSOURI: In 2011, 80 percent of public pension incomemay be deducted if Missouri AdjustedGross Income is less than $100,000 when married filing jointly or $85,000 for single filers, up to a limit of $33,703 for each spouse. In 2011 youmay also deduct 80 percent of Social Security income if over age 62 and Fed- eral Adjusted Gross Income is less than the limits above. Sales tax is from 5.1 to 8.8 percent, depending on location. MONTANA: There is a $3,760 pen- A F S A N E W S