The Foreign Service Journal - January/February 2018
92 JANUARY-FEBRUARY 2018 | THE FOREIGN SERVICE JOURNAL AFSA NEWS OH I O Retirement income is taxed. Taxpayers 65 and over may take a $50 credit per return. In addition, Ohio gives a tax credit based on the amount of the retirement income included in Ohio Adjusted Gross Income, reaching a maximum of $200 for any retirement income over $8,000. Social Security is excluded from taxable income. State sales tax is 5.75 percent. Counties and regional transit authorities may add to this, but the total must not exceed 8.75 percent. OKLAHOMA Individuals receiving FERS/ FSPS or private pensions may exempt up to $10,000, but not to exceed the amount included in the Fed- eral Adjusted Gross Income. Since 2011, 100 percent of a federal pension paid in lieu of Social Security (i.e., CSRS and FSRDS—“old system”—including the CSRS/FSRDS portion of an annuity paid under both systems) is exempt. Social Security included in FAGI is exempt. State sales tax is 4.5 percent. Local and other additions may bring the total up to 9.5 percent. OREGON Generally, all retirement income is subject to Oregon tax when received by an Oregon resident. However, federal retirees who retired on or before Oct. 1, 1991, may exempt their entire federal pension; those who worked both before and after Oct. 1, 1991, must prorate their exemption using the instructions in the tax booklet. If you are over age 62, a tax credit of up to 9 percent of taxable pension income is available to recipients of pension income, including most pri- vate pension income, whose household income was less than $22,500 (single) and $45,000 (joint), and who received less than $7,500 (single)/$15,000 (joint) in Social Security benefits. The credit is the lesser of the tax liability, or 9 percent of tax- able pension income. Social Security is excluded from taxable income. Oregon has no sales tax. PENNSYLVAN I A Government pensions and Social Security are not subject to personal income tax. Pennsylvania sales tax is 6 percent. Other taxing entities may add up to 2 percent. PUERTO R I CO The first $11,000 of income received from a federal pension can be excluded for individuals under 60. For those over 60, the exclusion is $15,000. If the individual receives more than one federal pension, the exclu- sion applies to each pension or annuity separately. Social Security is excluded from taxable income. RHODE I S LAND U.S. government pensions and annuities are fully tax- able. However, effective the 2017 tax year, taxpayers eli- gible for Social Security may take a $15,000 exemption on their retirement income. This applies to single tax- payers with FAGIs of up to $80,000 and to joint taxpay- ers up to $100,000 that are otherwise qualified. Social Security is taxed to the extent it is federally taxed. Sales tax is 7 percent; meals and beverages 8 per cent. SOUTH CAROL I NA Individuals under age 65 can claim a $3,000 deduc- tion on qualified retirement income; those age 65 or over may claim a $15,000 deduction on qualified retirement income ($30,000 if both spouses are over 65), but must reduce this figure by any other retire- ment deduction claimed. Social Security is excluded from taxable income. Sales tax is 6 percent plus up to 3 percent in some counties. Residents aged 85 and over pay 5 percent. SOUTH DAKOTA No personal income tax or inheritance tax. State sales and use tax is 4.5 percent; municipalities may add up to an additional 2.75 percent. Residents who are age 66 and older and have a yearly income of under $10,250 (single) or in a household where the total income was under $13,250 are eligible for a sales tax or a property tax refund. TENNESSEE Social Security, pension income and income from IRAs and TSP are not sub- ject to personal income tax. In 2017, most interest and dividend income is taxed at 4 percent if over $1,250 (single filers) or $2,500 (married filing jointly). However, for tax year 2015 and subsequently, those over 65 with total income from all sources of less than $37,000 for a single filer and $68,000 for joint filers are completely exempt from all taxes on income. State sales tax is 5 percent on food; 7 percent on other goods, with between 1.5 and 2.75 percent added, depending on jurisdiction. TEXAS No personal income tax, estate or inheritance tax. State sales tax is 6.25 per- cent. Local options can raise the rate to 8.25 percent. UTAH Utah has a flat tax rate of 5 percent of all income. For taxpayers over 65 there is a retirement tax credit of $450 for single filers and $900 for joint filers. This is reduced by 2.5 percent of income exceeding $25,000 for single filers and $32,000 for joint filers. See the state website for details. State sales tax is 4.7 percent; local option taxes may raise the total to as much as 9.95 percent.