|
SEPTEMBER 2005
- When considering a move outside the Commonwealth, there are naturally
several factors that a member weighs before making a decision. Among
them is whether their contributory pension, which is not subject to tax
here, will be taxed by the prospective new home state.
Currently fifteen states do not tax Mass. pensions. They are listed in the chart below.
In
addition, several states provide tax exemptions or exclusions, for
which Mass. pensions may qualify. For example, Maine offers a $6,000
pension exemption, while pensioners, 59 1/2 or over, may qualify for a
$20,000 exemption in New York.
Unfortunately,
there are states that tax Mass. pensions in full. Connecticut, Rhode
Island and Vermont are included in that group.
Since
such a disparity exists among the states and tax laws may contain
details which could disqualify a retiree, it's strongly suggested you
check with the tax officials in the particular state to which you are
interested in moving.
States: No Tax on Mass Pensions
Alabama
Alaska*
Florida*
Hawaii
Illinois
Michigan
Mississippi
Nevada*
|
New Hampshire*
Pennsylvania
South Dakota*
Tennessee*
Texas*
Washington*
Wyoming*
*No state income tax |
WEB UPDATE:
How The Other Forty-Nine States Tax Mass. Pensions
The
following table provides a brief outline as to how the other forty-nine
states treat Mass. pensions for income tax purposes. It compares the
major features of each state as they relate specifically to Mass.
pensions, and is not intended to be an exhaustive review of state
income tax laws.
If you're
interested in a particular state, you should contact the tax officials
in that state to obtain any details and/or recent developments.
| State |
Tax Treatment of
Mass.Pensions |
| Alabama |
MA pensions are tax
exempt |
| Alaska |
No personal income tax |
| Arizona |
MA pensions are taxed
and do not qualify for a $2,500 pension exemption |
| Arkansas |
MA pensions qualify
for a $6,000 pension exemption |
| California |
MA pensions are taxed |
| Colorado |
MA pensions qualify
for a pension exemption: age 55 to 64 qualify for a $20,000 exemption;
age 65 or older qualify for a $24,000 exemption |
| Connecticut |
MA pensions are taxed |
| Delaware |
MA pensions qualify
for a pension exemption: under age 60 receive a $2,000 exemption;
age 60 or older receive a $12,500 exemption |
| District of Columbia |
MA pensions are taxed |
| Florida |
No personal income tax |
| Georgia |
MA pensions qualify
for a pension exemption: for tax year 2004, age 62 or older or totally
disabled receive a maximum exemption of $15,000 |
| Hawaii |
MA pensions are tax-exempt |
| Idaho |
MA pensions are taxed |
| Illinois |
MA pensions are tax-exempt |
| Indiana |
MA pensions are taxed |
| Iowa |
MA pensions qualify
for the pension exemption: age 55 or older receives an exemption:
for tax year 2004, the exemption is $6,000 for single filers and
$12,000 for married, filing jointly |
| Kansas |
MA pensions are taxed |
| Kentucky |
MA pensions qualify
for a pension exemption: for tax year 2004, the maximum exemption
is $40,200 |
| Louisiana |
MA pensions qualify
for the pension exemption: age 65 or older qualify for an exemption
of $6,000 for single filers and $12,000 for married, if filing joint
and both are receiving a pension |
| Maine |
MA pensions qualify
for the $6,000 pension exemption which is reduced by Social Security
benefits |
| Maryland |
MA pensions qualify
for the pension exemption, which is first reduced by Social Security
benefits. Pensioners must be age 65 or older and/or totally disabled
to qualify for the exemption and for tax year 2004, the maximum exemption
is $20,700 |
| Michigan |
MA pensions are tax-exempt |
| Minnesota |
MA pensions are taxed |
| Mississippi |
MA pensions are tax-exempt |
| Missouri |
All out-of-state government
pensions qualify for the public employee pension exemption of $6,000,
w hich is phased out for taxpayers, whose income is greater than
$31,000 for single filers or $44,000 for married, filing jointly
when both are receiving pensions. |
| Montana |
MA pensions qualify
for the $3,600 pension exemption, which is reduced by $2 for every
$1 that the federal AGI exceeds $30,000 |
| Nebraska |
MA pensions are taxed |
| Nevada |
No personal income tax |
| New Hampshire |
No personal income tax |
| New Jersey |
All out-of-state government
pensions qualify for the pension exemption: age 62 or older or disabled
qualifies for the exemption, for tax year 2004, the maximum exemption
is $15,000 for single filers and $20,000 for married, filing jointly |
| New Mexico |
MA pensions are taxed |
| New York |
MA pensions qualify
for the pension exemption; age 59 1/2 or older qualify for a $20,000
exemption |
| North Carolina |
MA pensions qualify
for the public pension exemption of $4,000 |
| North Dakota |
MA pensions are taxed |
| Ohio |
MA pensions can be applied
toward a retirement income tax credit, currently up to $200 |
| Oklahoma |
MA pensions qualify
for the pension exemption: age 65 or older whose adjusted gross income
is $25,000 or less for single filers, or $50,000 or less for married,
filing jointly qualifies for the exemption; for tax year 2004, the
exemption is $5,500 |
| Oregon |
All MA pensions can
be applied toward a retirement income tax credit |
| Pennsylvania |
MA pensions are tax-exempt
provided taxpayer is age 59 1/2 or older |
| Rhode Island |
MA pensions are taxed |
| South Carolina |
MA pensions qualify
for the public employee pension exemption: for tax year 2004, under
age 65 can deduct up to $3,000; age 65 or older can deduct up to
$10,000 |
| South Dakota |
No personal income tax |
| Tennessee |
No personal income tax |
| Texas |
No personal income tax |
| Utah |
MA pensions for those
under the age of 65 qualify for the $4,800 pension exemption; and
those age 65 or older qualify for a $7,500 exemption from all income
sources, subject to a $1 reduction for every $2 of federal AGI in
excess of $25,000 for single filers or $32,000 for married, filing
jointly |
| Vermont |
MA pensions are taxed |
| Virginia |
MA pensions are taxed |
| Washington |
No personal income tax |
| West Virginia |
MA pensions qualify
for $2,000 exemption |
| Wisconsin |
MA pensions are taxed |
| Wyoming |
No personal income tax |
|
Retirement Benefits 
