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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*
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New Hampshire*
Pennsylvania
South Dakota*
Tennessee*
Texas*
Washington*
Wyoming*
*No state income tax
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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.
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State
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Tax Treatment of Mass.Pensions
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MA pensions are tax exempt
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No personal income tax
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MA pensions are taxed and do not qualify for a $2,500 pension exemption
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MA pensions qualify for a $6,000 pension exemption
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MA pensions are taxed
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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
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MA pensions are taxed
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MA
pensions qualify for a pension exemption: under age 60 receive a $2,000
exemption; age 60 or older receive a $12,500 exemption
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MA pensions are taxed
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No personal income tax
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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
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MA pensions are tax-exempt
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MA pensions are taxed
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MA pensions are tax-exempt
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MA pensions are taxed
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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
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MA pensions are taxed
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MA pensions qualify for a pension exemption: for tax year 2004, the maximum exemption is $40,200
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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
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MA pensions qualify for the $6,000 pension exemption which is reduced by Social Security benefits
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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
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MA pensions are tax-exempt
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MA pensions are taxed
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MA pensions are tax-exempt
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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.
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MA pensions qualify for the $3,600 pension exemption, which is reduced by $2 for every $1 that the federal AGI exceeds $30,000
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MA pensions are taxed
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No personal income tax
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No personal income tax
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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
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MA pensions are taxed
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MA pensions qualify for the pension exemption; age 59 1/2 or older qualify for a $20,000 exemption
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MA pensions qualify for the public pension exemption of $4,000
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MA pensions are taxed
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MA pensions can be applied toward a retirement income tax credit, currently up to $200
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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
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All MA pensions can be applied toward a retirement income tax credit
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MA pensions are tax-exempt provided taxpayer is age 59 1/2 or older
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MA pensions are taxed
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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
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No personal income tax
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No personal income tax
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No personal income tax
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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
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MA pensions are taxed
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MA pensions are taxed
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No personal income tax
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MA pensions qualify for $2,000 exemption
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MA pensions are taxed
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No personal income tax
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Retirement Systems 
