The Foreign Service Journal - January/February 2018

THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2018 91 may exclude some income if Federal Adjusted Gross Income is under $33,700 and nontaxable Social Secu- rity is under $9,600. For a couple who are both over 65, the limits are $42,000 for Adjusted Gross Income and $12,000 for nontaxable Social Security. Statewide sales and use tax is 6.875 percent; some local addi- tions may increase the total to 9.53 percent. MI SS I SS I PP I Social Security, qualified retirement income from fed- eral, state and private retire- ment systems, and income from IRAs are exempt from Mississippi tax. There is an additional exemption of $1,500 on other income if over 65. Statewide sales tax is 7 percent. MI SSOUR I Up to 65 percent of pub- lic pension income may be deducted if Missouri Adjusted Gross Income is less than $100,000 when married filing jointly or $85,000 for single filers, up to a limit of $36,442 for each spouse. The maximum private pension deduction is $6,000. You may also deduct 100 percent of Social Security income if over age 62 and Federal Adjusted Gross Income is less than the limits above. Sales tax is 4.225 percent; local addi- tions may add another 2 percent. MONTANA There is a $4,110 pension income exclusion if Federal Adjusted Gross Income is less than $34,260. Those over 65 can exempt an additional $800 of interest income for single taxpayers and $1,600 for married joint filers. Social Security is sub- ject to tax. Montana has no general sales tax, but tax is levied on the sale of various commodities. NEBRASKA U.S. government pensions and annuities are fully tax- able. Social Security is tax- able. State sales tax is 5.5 percent, with local additions of up to 2 percent. NEVADA No personal income tax. Sales and use tax varies from 6.85 to 8.1 percent, depending on local jurisdic- tion. NEW HAMPSH I RE No personal income tax. There is no estate or inheritance tax. There is a 5 percent tax on interest/divi- dend income over $2,400 for singles ($4,800 mar- ried filing jointly). A $1,200 exemption is available for those 65 or over. No general sales tax. NEW J ERSEY Pensions and annuities from civilian government service are subject to state income tax, with exemptions for those aged 62 or older or totally and permanently disabled. However, see this link for the distinction between the “Three-Year Method” and the “General Rule Method” for contribu- tory pension plans: http:// www.state.nj.us/treasury/ taxation/njit6.shtml. For 2017, qualifying singles and heads of households may be able to exclude up to $30,000 of retirement income; those married filing jointly up to $40,000; those married filing separately up to $20,000 each. These exclusions are eliminated for New Jersey gross incomes over $100,000. Residents over 65 may be eligible for an additional $1,000 personal exemption. Social Security is excluded from taxable income. State sales tax is 6.875 percent. NEW MEX I CO All pensions and annuities are taxed as part of Federal Adjusted Gross Income. Taxpayers 65 and older may exempt up to $8,000 (single) or $16,000 (joint) from any income source if their income is under $28,500 (individual fil- ers) or $51,000 (married filing jointly). The exemp- tion is reduced as income increases, disappearing altogether at $51,000. New Mexico has a gross receipts tax, instead of a sales tax, of 5.125 percent; county and city taxes may increase the total to 6.625 percent in some jurisdictions. NEW YORK Social Security, U.S. govern- ment pensions and annuities are not taxed. For those over age 59½, up to $20,000 of other annuity income (e.g., Thrift Savings Plan) may be excluded. See N.Y. Tax Publication 36 at https:// www.tax.ny.gov/pdf/publica- tions/income/pub36.pdf for details. Sales tax is 4 percent statewide. Other local taxes may add up to an additional 5 percent. NORTH CAROL I NA Pursuant to the Bailey deci- sion (see http://dornc.com/ taxes/individual/benefits. html), government retire- ment benefits received by federal retirees who had five years of creditable service in a federal retirement system on Aug. 12, 1989, are exempt from North Carolina income tax. Those who do not have five years of creditable service on Aug. 12, 1989, must pay North Carolina tax on their federal annuities. In tax year 2014 and later, the $4,000 deduction is no lon- ger available. For those over 65, an extra $750 (single) or $1,200 (couple) may be deducted. Social Security is excluded from taxable income. State sales tax is 4.75 percent; local taxes may increase this by up to 3 percent. NORTH DAKOTA All pensions and annuities are fully taxed. Social Secu- rity is excluded from taxable income. General sales tax is 5 percent; 7 percent on liquor. Local jurisdictions impose up to 3 percent more.