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78

JANUARY-FEBRUARY 2017

|

THE FOREIGN SERVICE JOURNAL

AFSA NEWS

abled, Civil Service Retire-

ment System and Foreign

Service Retirement and

Disability System pensions

qualify for a deduction

in 2016 of a maximum of

$27,876 for a single return

and up to $41,814 for a joint

return. Federal Employ-

ees’ Retirement System or

Foreign Service Pension Sys-

tem pensions do not qualify

for this deduction. The

deduction is reduced dollar

for dollar by Social Security

benefits. Social Security

itself is not taxed. Idaho

state sales tax is 6 percent;

some local jurisdictions

add as much as another 3

percent.

I L L I NO I S

Illinois does not tax U.S. gov-

ernment pensions or Social

Security. State sales tax is

6.25 percent. Local additions

can raise sales tax to 8.45

percent in some jurisdictions.

I ND I ANA

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 Social 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 exclusion

for survivor annuitants of

federal annuities. Social

Security is excluded from

taxable income. Sales tax

and use tax is 7 percent.

I OWA

Generally taxable. A mar-

ried couple with an income

for the year of less than

$32,000 may file for exemp-

tion, 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 exemption

if their income is $24,000

or less. Social Security

is excluded from taxable

income. Statewide sales tax

is 6 percent, with no more

than 1 percent added in local

jurisdictions.

KANSAS

U.S. government pensions

are not taxed. There is an

extra deduction of $850 if

over 65. Social Security is

exempt if Federal Adjusted

Gross Income is under

$75,000. State sales tax is

6.3 percent, 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, pension/annuity income

up to $41,110 remains fully

excludable for 2016. Social

Security is excluded from tax-

able income. Sales and use tax

is 6 percent statewide, with no

local sales or use taxes.

LOU I S I ANA

Federal retirement ben-

efits are exempt from state

income tax. There is an

exemption of $6,000 of

other annual retirement

income received by any per-

son age 65 or over. Married

filing jointly may exclude

$12,000. Social Security

is excluded from taxable

income. State sales tax is

4 percent with local addi-

tions up to a possible total

of 10.75 percent. Use tax is

8 percent regardless of the

purchaser’s location.

MA I NE

Recipients of a government-

sponsored pension or

annuity who are filing singly

may deduct up to $10,000

($20,000 for married filing

jointly) on income that is

included in their Federal

Adjusted Gross Income,

reduced by all Social Secu-

rity and railroad benefits.

For those aged 65 and over,

there is an additional stan-

dard deduction of $1,450

(single), $1,150 (married fil-

ing singly) or $2,200 (mar-

ried filing jointly). General

sales tax is 5.5 percent; 8

percent on meals and liquor.

MARYLAND

Those over 65 or perma-

nently disabled, or whose

spouse is permanently

disabled, may under certain

conditions be eligible for

Maryland’s maximum pen-

sion exclusion of $29,200.

Also, all individuals 65

years or older are entitled

to an extra $1,000 personal

exemption in addition to

the regular $3,200 personal

exemption available to all

taxpayers. Social Security

is excluded from taxable

income. See the work-

sheet and instructions in

the Maryland Resident Tax

Booklet. General sales tax

is 6 percent; 9 percent on

liquor.

MASSACHUSETTS

Federal pensions and Social

Security are excluded

from Massachusetts gross

income. Each taxpayer over

age 65 is allowed an addi-

tional $700 exemption on

other income. Sales tax is

6.25 percent.

MI CH I GAN

Pension benefits included in

Adjusted Gross Income from

a private pension system

or an IRA are deductible for

those born before 1946 to

a maximum of $47,309 for

a single filer, or $94,618 for

joint filers; public pensions

are exempt. If born after

1946 and before 1952, the

exemption for public and

private pensions is limited

to $20,000 for singles and

$40,000 for married fil-

ers. If born after 1952, not

eligible for any exemption

until reaching age 67. Social

Security is excluded from

taxable income. Full details

at:

www.michigan.gov/docu

ments/taxes/PensionBen

efitsChart_479546_7.pdf.

Michigan’s state sales tax

rate is 6 percent. There are

no city, local or county sales

taxes.

MI NNESOTA

Social Security income is

taxed by Minnesota to the

same extent it is on your

federal return. If your only

income is Social Security,

you would not be required