The Foreign Service Journal - January/February 2018

90 JANUARY-FEBRUARY 2018 | THE FOREIGN SERVICE JOURNAL AFSA NEWS System pensions qualify for a deduction in 2017 of a maximum of $27,876 for a single return and up to $41,814 for a joint return. Federal Employees Retire- ment System or Foreign Ser- vice Pension System pen- sions 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. government 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 AGI is less than $40,000. There is no pension exclu- sion 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 $25,000 or less. Social Security is excluded from taxable income. Statewide sales tax is 6 percent; local option taxes can add up to another 6.8 percent. KANSAS U.S. government pensions are not taxed. There is an extra deduction of $850 if over 65. Social Security is exempt if Federal AGI is under $75,000. State sales tax is 6.5 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, pen- sion/annuity income up to $41,110 remains excludable for 2017. Social Security is excluded from taxable 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 5 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 filing singly) or $2,200 (married filing jointly). General sales tax is now 5.5 percent; 8 percent on meals and liquor. MARYLAND Those over 65 or perma- nently disabled, or who have a spouse who is permanently disabled, may under certain conditions be eligible for Maryland’s maximum pension exclusion of $29,400. Also, all indi- viduals 65 years or older are entitled to an extra $1,000 personal exemption in addi- tion to the regular $3,200 personal exemption avail- able to all taxpayers. Social Security is excluded from taxable income. See the worksheet 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 $49,861 for a single filer, or $99,723 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: http://www.michigan . gov/documents/taxes/201 6RetirementAndPensionBe nefitsChart_544015_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 to file an income tax return. All federal pensions are tax- able, but single taxpayers who are over 65 or disabled