STATE PERSONAL INCOME TAXES ON PENSIONS AND RETIREMENT INCOME: TAX YEAR 2008

Contents

 

Ronald Snell and Bert Waisanen

National Conference of State Legislatures
Denver, Colorado
June  2009

 

Most states that levy a personal income tax allow people who receive retirement income to exclude part of it from their taxable income. The table that accompanies this introduction provides state-by-state detail. “Retirement income” means income from federal, state and local governments’ retirement plans, Social Security, Railroad Retirement, private pension plans, and deferred compensation plans in the public and private sectors. “Retirement income” excludes income from current employment, rents and dividends, disability payments and SSI. This report does not address personal exemptions or deductions that are available to every filer over some specified age, like the federal provision for a larger standard deduction for people who are 65 years old or older than for those under 65.
 
State governments provide various tax benefits for senior citizens besides age-determined income tax exclusions. Those were reported in detail in NCSL’s publication State Tax Policy and Senior Citizens (second edition, Denver, Colo., 1994). The AARP State Handbook of Economic, Demographic & Fiscal Indicators also provides data on state tax breaks for senior citizens (Washington, D.C.: AARP Public Policy Institute, 2008).
 
State policies on retirement income exclusions vary greatly, but have one or both of two purposes: to protect the income of taxpayers who are no longer in the workforce, and to serve as an economic development tool by attracting retired people to, or retaining them in, a state. Such tax provisions seem to have originated years ago as a means of assisting retired public employees who received relatively small pensions. Because public pension benefits have improved to match or exceed those in the private sector, the justification for favored tax status for government retirees has weakened. Many states have made age, not former employment in the public sector, the criterion for retirement income exclusions.
 

 


 

Retirement exclusions and general tax policy

States are generally free from federal control in deciding how to tax pensions, but some limits apply. State tax policy cannot discriminate against federal civil service pensions, according to the U.S. Supreme Court decision in Davis v. Michigan (1989), which ended the once common practice of more favorable state tax treatment for state pensions than for federal civil service pensions. In 1992 the U.S. Supreme Court further ruled, in Barker v. Kansas, that states cannot tax U.S. military pensions if they exempt state pensions from taxation. Over time, as the table demonstrates, these rulings have produced substantial conformity in the way each state taxes the three kinds of pensions, although differential treatment persists in Indiana and New Jersey. 

 
There is no federal impediment to a different state tax policy for public and private pensions, and, as the table indicates, some states provide less favorable tax treatment for private pension income than for public pensions and Social Security retirement benefits.
 
Retirement income exclusions can be criticized for violating the rule of horizontal equity, which is that taxpayers in similar economic circumstances should be treated similarly. Income exclusions designated for an age group violate horizontal equity by benefiting taxpayers on the basis of age instead of the amount of income. Some states partially address this criticism by limiting retirement income exclusions to lower-income taxpayers, thus indicating that their tax provisions are primarily designed to protect the low-income elderly. States that provide relatively high tax exclusions for all taxpayers in an age group presumably are also acting to attract retired people to the state, or to keep retired residents from moving to another state with a tax regimen more favorable to them. 

Prevalence of retirement income exclusions

Of the 50 states, seven – Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming – do not levy a personal income tax. New Hampshire and Tennessee collect income tax only on interest and dividend income. The District of Columbia and 41 states levy a broad-based personal income tax.
 
Among the 41 states with a broad-based income tax, 36 offer exclusions for some amount of specifically identified type of state or federal pension income or both, a broad income exclusion or a tax credit targeted at the elderly. The District of Columbia provides a public pension exclusion. The five states that do not do so are California, Indiana, Nebraska, Rhode Island and Vermont.  Some of those five states partially or fully exclude Social Security income from state taxation, and no state collects income taxes on Railroad Retirement income. 
 

Limited retirement income exclusions

States take two broad approaches to excluding retirement income from taxation. Some states provide a specific amount of exclusion according to the type of retirement income. For example, Arizona allows the exclusion of $2,500 of state or local government retirement income, federal pension income and military pension income; full exclusion for Social Security income; and no exclusion for private-sector pension income. This model was more prevalent in the past than now. It allowed states to provide a greater exclusion for state and local benefits than for federal civil service benefits, until Davis v Michigan prohibited that in 1989. Attaching income exclusions to retirement income according to its source is now relatively rare among the states (except with reference to private-sector pension or deferred compensation benefits), but it is the practice in Connecticut (starting in 2008), the District of Columbia, Indiana, New Jersey and North Dakota, as well as Arizona.
 
The more usual practice is for states to provide a retirement income exclusion that taxpayers over a specified age, usually 65, can apply to retirement income. Usually the exclusion is applicable to public sector benefits, Social Security and only some private sector benefits, but sometimes it is applicable to all income. In a number of states, Social Security is subject to a separate exclusion. Virginia, for example, allows an income exclusion of $12,000 per taxpayer applicable to income from any source for people over 65 (subject to income limitations). In addition, Social Security income is fully exempt. Colorado has a different practice: it allows an exclusion of $24,000 per tax return for filers over 65, regardless of the source of income, and includes Social Security benefits in the base on which the exclusion is determined. 
 
In addition to those in Colorado and Virginia, exclusions of this sort exist in Arkansas, Delaware, Georgia, Idaho, Iowa, Kentucky, Maine, Maryland, Minnesota, Missouri, Montana, New Jersey, New Mexico, North Carolina, Oklahoma, South Carolina, Utah and West Virginia. The amount of the exclusion varies from $2,000 in West Virginia to $41,110 in Kentucky. 

Social Security retirement benefit exclusions

 

Most states exclude Social Security retirement benefits from state income taxes. As the table indicates, the District of Columbia and 26 states with income taxes provide a full exclusion for Social Security benefits – Alabama, Arizona, Arkansas, California, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Missouri, Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia, and West Virginia.
 
The remaining 15 states with broad-based income taxes tax Social Security to some extent:
 
  • Minnesota, Nebraska, North Dakota, Rhode Island and Vermont tax Social Security income to the extent it is taxed by the federal government.
  • Connecticut, Iowa, Kansas, Missouri, Montana and Wisconsin tax Social Security income above amounts of total income. Iowa will phase out its Social Security tax levy from 2007 through 2014. Missouri will phase out its Social Security tax levy by 2010, although the tax will continue above certain income levels (see notes to table).
  • Colorado, Kentucky, New Mexico and Utah require that federally untaxed Social Security benefits be added back to federal AGI to calculate the base against which their broad age-determined income exclusions apply.
     

Full and nearly full pension income exclusions

 

Ten states exclude all federal, state and local pension income from taxation – Alabama, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania. Among these 10 states, only Kansas taxes any Social Security income; in 2007 Kansas provided that by tax year 2008 persons with an AGI of less than $75,000 may exclude Social Security income from state taxation.
 
These 10 states differ on the taxation of retirement income from private-sector sources. Kansas and Massachusetts do not exclude any private-sector retirement income, but most of the others allow a fairly broad exclusion:
 
  • Pennsylvania allows a full exclusion. 
  • Alabama excludes income from defined benefit plans.
  • Hawaii excludes income from contributory plans.
  • Illinois and Mississippi exclude income from qualified retirement plans.
  • Louisiana, Michigan and New York cap the private-sector exclusion at $6,000, $42,240 and $20,000, respectively (amounts are for taxpayers filing singly).
     

Sources: 

Instructions for state income tax returns for tax year 2000-2007 (selected states).
 
David Baer, State Economic, Demographic and Fiscal Handbook 2000 (Washington, D.C.: AARP Public Policy Institute, 2000).
David Baer, State Handbook of Economic, Demographic & Fiscal Indicators, 7th edn. (Washington, D.C.: AARP, 2008).
 
State of Connecticut, Commissioner of Revenue Services, “Study of the Taxation of Federal Pensions” (Hartford, 2000).
 
Nina Manzi, Joel Michael and Paul Wilson, "State Income Tax Revenues in 2002 and 2030: The Impact of the Retirement of the Baby Boom," State Tax Notes 39:3 (January 23, 2006): 215-240.
 
National Conference of State Legislatures, State Tax Actions  (Denver, published annually)
 
Faith Russell, Individual Income Tax Provisions in the States, 2001, (State of Wisconsin, Legislative Fiscal Bureau, January 2003), Table 2: State Tax Exclusion for Pension/Retirement Income.(Tax Year 2001).

 


STATE PERSONAL INCOME TAXES ON RETIREMENT INCOME: 
TAX YEAR 2008

* indicates note at end of table
SS = Social Security, RR = Railroad Retirement, PIT = Personal Income Tax
 
State
State/Local Pension Exclusion
Federal Civil Service Pension Exclusion
Military Pension Exclusion
Social Security/
Railroad Retirement
Private
Pension Exclusion
AL
Full
Full
Full
Full
Income from defined benefit plans
AK
No PIT
 
 
 
 
AZ
$2,500
$2,500
$2,500
Full
None
$6,000
$6,000
$6,000
Full
$6,000, including IRA distributions after age 59½
CA
Tax credit of $94 (tax year 2007) for each taxpayer over 65 years of age. No tax exclusions based on specific types of income other than Social Security and RR.
Full
None
65 +, $24,000
55-65, $20,000
65 +, $24,000
55-65, $20,000
65 +, $24,000
55-65, $20,000
65 +, $24,000
55-65, $20,000
65 +, $24,000
55-65, $20,000
CT
None
None
50% exclusion beginning in tax year 2008
SS is taxed above an income threshold;
RR: Full
None
60+, $12,500
under 60, $2,000
60+, $12,500
under 60, $2,000
60+, $12,500
under 60, $2,000
Full
60+, $12,500
under 60, $2,000
DC
62+, $3,000
62+, $3,000
62+, $3,000
Full
None
FL
No PIT
 
 
 
 
62+, $25,000
(for 2006)
2007: $30,000
2008: $35,000
62+, $25,000
(for 2006)
2007: $30,000
2008: $35,000
62+, $25,000
(for 2006)
2007: $30,000
2008: $35,000
Full
62+, $25,000
(for 2006)
2007: $30,000
2008: $35,000
HI
Full
Full
Full
Full
Full for contributory plans
ID
 
65+, 62+ if disabled: $21,900 filing singly/$32,850 filing jointly, (minus SS/RR benefits) limited to certain public safety officers’ benefits.
65+, 62+ if disabled: $21,900 filing singly/$32,850 filing jointly, (minus SS/RR benefits)
65+, 62+ if disabled: $21,900 filing singly/$32,850 filing jointly, (minus SS/RR benefits)
Full
None
IL
Full
Full
Full
Full
Full for qualified retirement plans
None
62+:$2,000 less SS benefits. Base is $4,000 for married couple
60+; Maximum deduction of $5,000 for tax year 2008 and thereafter
Full
None
IA*

55+: $6,000 single, $12,000 j
joint
Beginning in 2007:
65+: $18,000 single, $24,000 joint.
Beginning in 2009
$24,000 single,
$32,000 joint.
55+: $6,000 single, $12,000 j
joint
Beginning in 2007:
65+: $18,000 single, $24,000 joint.
Beginning in 2009
$24,000 single,
$32,000 joint.
55+: $6,000 single, $12,000 j
joint
Beginning in 2007:
65+: $18,000 single, $24,000 joint.
Beginning in 2009
$24,000 single,
$32,000 joint.
50% of SS benefits taxable above an income floor; RR: Full
 
To be phased out entirely from 2007 through 2014
55+: $6,000 single, $12,000 j
joint
Beginning in 2007:
65+: $18,000 single, $24,000 joint.
Beginning in 2009
$24,000 single,
$32,000 joint.
Full for Kansas pensions; none for out-of-state
Full
Full
Exempt with income limitations. See notes
RR: Full
None
 
Full for benefits earned before 1/1/98. Capped at $41,110 for tax year 2006 and thereafter. Benefits earned after that date.
Full for benefits earned before 1/1/98. Capped at $41,110 for tax year 2006 and thereafter. Benefits earned after that date.
Full for benefits earned before 1/1/98. Capped at $41,110 for tax year 2006 and thereafter. Benefits earned after that date.
Full exemption, subject to income exclusion cap of $41,110
Full for benefits earned before 1/1/98. Capped at $41,110 for tax year 2006 and thereafter. Benefits earned after that date.
LA
Full for state pensions; out-of-state are treated like private pensions
Full
Full
Full
65+: $6,000 single, $12,000 joint
$6,000 per taxpayer minus SS/RR benefits
$6,000 per taxpayer minus SS/RR benefits
$6,000 per taxpayer minus SS/RR benefits
Full
$6,000 exclusion applies to 401(a), 403, 457(b) plans
MD*

65+: $21,500 per person minus SS/RR benefits (for 2006)
65+: $21,500 per person minus SS/RR benefits (for 2006)
65+: $21,500 per person minus SS/RR benefits (for 2006);
$5,000 exclusion at age 65 (2006).
Full
65+: $21,500 per person minus SS/RR benefits. Not applicable to IRA, Roth IRA, SEP or Keogh plans.
MA
Full for MA pensions; out-of-state are exempt if the state extends reciprocal treatment to MA pensions.
Full
Full
Full
None
Full for MI pensions; out-of-state are exempt if the state extends reciprocity to MI pensions. Otherwise treated like
private pensions.
Full
Full
Full
$42,240 single, $84,480 joint, minus public retirement benefits for tax year 2007 (adjusted annually). Income from deferred comp plans (401[k], 457, 403[b]) is not exempt.
MN
None
None
None
SS taxable to extent federally taxed;
RR: Full
None
MS
Full
Full
Full
Full
Full for qualified plans
Greater of $6,000 single, $12,000 joint, (reduced by amount total income exceeds certain limits) or 20% of benefits for 2007 (rising to 100% of benefits for 2012) reduced by amount of any Social Security exclusion.
Greater of $6,000 single, $12,000 joint, (reduced by amount total income exceeds certain limits) or 20% of benefits for 2007 (rising to 100% of benefits for 2012) reduced by amount of any Social Security exclusion.
Greater of $6,000 single, $12,000 joint, (reduced by amount total income exceeds certain limits) or 20% of benefits for 2007 (rising to 100% of benefits for 2012) reduced by amount of any Social Security exclusion.
20% of SS excluded for 2007, to increase to 100% in 2012, subject to income limits.
RR: Full
$4,000 (counted toward the $6,000 cap if applicable)
Up to $3,600 for filers whose AGI is less than $30,000
Up to $3,600 for filers whose AGI is less than $30,000
Up to $3,600 for filers whose AGI is less than $30,000
SS is taxable for taxpayers whose income including SS exceeds $25,000 single, $32,000 joint. RR: Full
Up to $3,600 for filers whose AGI is less than $30,000
NE
None
None
None
SS taxable to extent federally taxed; RR: Full
None
NV
No PIT
 
 
 
 
NH
Limited PIT
 
 
 
 
62+: $15,000 single, $20,000 joint. Income limits apply.
62+: $15,000 single, $20,000 joint. Income limits apply.
Full
Full
62+: $15,000 single, $20,000 joint. Income limits apply.
Pension and Social Security income are taxable, except for RR income. There is a general income exemption for taxpayers aged 62 and older of $10,000 single, $16,000 filing jointly, phased out as AGI grows, and ended at AGI of $51,000 for joint filers, $25,500 for single.
NY
Full for NY pensions; out-of-state treated like private pensions.
Full
Full
Full
$20,000 for taxpayers aged 59 years six months and older.
$4,000 single; $8,000 filing jointly
$4,000 single; $8,000 filing jointly
$4,000 single; $8,000 filing jointly
Full
$2,000 single; $4,000 filing jointly
ND
$5,000 minus any SS benefit; limited to certain public safety system members
$5,000 minus any SS benefit
$5,000 minus any SS benefit
SS taxable to extent federally taxed;
RR: Full
None
Certain tax credits apply; see note
Certain tax credits apply; see note
Full
Full
See note
Amount included in Federal AGI, not to exceed $10,000 per retiree from all retirement benefits.
Amount included in Federal AGI, not to exceed $10,000 per retiree from all retirement benefits.
Amount included in Federal AGI, not to exceed $10,000 per retiree from all retirement benefits.
Full
Maximum of $10,000 For retirees with income below $37,500 (single) and $75,000 (joint).
 
Tax credit of up to 9% of taxable pension income; income limits apply
Tax credit of up to 9% of taxable pension income; income limits apply
Tax credit of up to 9% of taxable pension income; income limits apply
Full
Tax credit of up to 9% of taxable pension income; income limits apply
PA
Full
Full
Full
Full
Full
RI
None
None
None
SS taxable to extent federally taxed; RR: Full
None
Under 65: $3,000; over 65: $10.000; see note
Under 65: $3,000; over 65: $10.000; see note
Under 65: $3,000; over 65: $10,000; see note
Full
Under 65:  $3,000; over 65: $10.000; see note
SD
No PIT
 
 
 
 
Limited PIT: See note
 
 
 
 
TX
No PIT
 
 
 
 
Effective 1/1/08, a nonrefundable retirement tax credit for the single rate individual income tax as follows: (1) a credit of $450 for a person 65 or older and born on or before 12/31/52; and (2) a credit equal to the lesser of $288 or 6% of the retirement income for a person under 65 and born on or before 12/31/52; and reduces both credits by $.025 for each dollar by which income exceeds $32,000 (married filing joint or head of household), $16,000 (married filing separately), or $25,000 (single).
VT
None
None
None
SS taxable to extent federally taxed; RR: Full
None
62 -64 $6,000 per taxpayer; 65 and older, $12,000 per taxpayer
62 -64 $6,000 per taxpayer; 65 and older, $12,000 per taxpayer
62 -64 $6,000 per taxpayer; 65 and older, $12,000 per taxpayer
Full
62 -64 $6,000 per taxpayer; 65 and older, $12,000 per taxpayer
VA 2004 legislation: Provisions above remain in effect for those over 65. The $6,000 deduction will not be available to those who turn 62 after January 1, 2004. For future beneficiaries, there will be a dollar-for-dollar reduction in the benefit as modified federal AGI, which excludes Social Security, rises above $75,000 for joint filers and $50,000 for single filers.
WA
No PIT
 
 
 
 
Allows an $8,000 exclusion for those 65 or older or who are permanently disabled regardless of the source of the income. Pension exclusions count against the $8,000.
WV*
Income from public safety pension systems is excluded; $2,000 for benefits from WV PERS and WV TRS
$2,000; full for certain retired federal law enforcement personnel
$22,000
SS: Taxable to extent federally taxable.
RR: Full
None; see note
WI*

Beginning in tax year 2009, $5,000, with income limitations, for benefits from qualified plans.
Beginning in tax year 2009, $5,000, with income limitations, for benefits from qualified plans.
Full
SS: up to 50% exempt;
RR: Full
SS: Full in tax year 2008 and thereafter.
Beginning in tax year 2009, $5,000, with income limitations, for benefits from qualified plans.
WY
No PIT
 
 
 
 

 

 

NOTES:
AR: Amount indicated is a retirement income exclusion; the total exclusion may not be more than $6,000 from all exempt sources other than SS/RR retirement income.
CO: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources. However, SS/RR retirement income not taxed by the federal government is not added back to AGI for state income tax purposes.
DE: Amounts indicated are a retirement income exclusion per taxpayer; the total exclusion may not be more than shown from all exempt sources other than SS/RR retirement income.
GA: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than shown from all exempt sources other than SS/RR retirement income. $4,000 of the amount can be earned income. The exclusion will rise to $30,000 for tax year 2007 and $35,000 for tax year 2008 and subsequent years.
IN: Taxpayers over 65 may be entitled to a tax credit ranging from $40 to $100, depending on federal adjusted gross income.
IA: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources. From 2007 on, Social Security income will be calculated as part of the exclusion.
KS:   For tax year 2007, taxpayers with federal adjusted gross income of $50,000 or under may exclude Social Security benefits. For tax year 2008 and thereafter, the AGI limit increases to $75,000.
KY: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources.
ME: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources.
MD: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources.
MI: Senior citizens (age 65 or older) may subtract interest, dividends and capital gains included in AGI. For tax year 2007, this subtraction, which is annually adjusted, is limited to a maximum of $9,420 on a single return or $18,840 on a joint return. However, the maximum must be reduced by the retirement pension subtraction claimed.
MO: Summary of 2007 legislation, effective January 1 2007:  this bill authorizes an income tax deduction to be phased-in over six years for Social Security benefits, Social Security disability benefits, and benefits received from a nonprivate retirement system for individuals 62 years of age or older. For 2007, a taxpayer can deduct 20% of his or her Social Security benefits; for 2008, 35%; for 2009, 50%; for 2010, 65%; for 2011, 80%; and for 2012 and thereafter, 100%. A single taxpayer with an adjusted gross income of $85,000 or less or a married taxpayer filing a combined return with an adjusted gross income of $100,000 or less will qualify for the maximum deduction. If a taxpayer's adjusted gross income exceeds the income amount, the deduction will be decreased by $1 for every dollar in excess of the maximum. If a taxpayer receives both Social Security benefits and public retirement benefits, the maximum deduction for the publicly funded retirement benefits will be decreased by $1 for every dollar of Social Security benefits received by the taxpayer if the benefits are not included in his or her Missouri adjusted gross income. The maximum deduction for the publicly funded retirement benefits is limited to the maximum Social Security benefits available for the tax year less any Social Security benefits not taxable to Missouri.
MT: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources. Legislation in 2009 provided that the $3,600 limit will be adjusted annually for inflation, based on the 2009 amount, beginning with the exclusion for 2010 (H.B. 315 of the 2009 session, chapter 382, Laws of 2009).
NJ: Taxpayers over 62 are entitled to an additional income exclusion to allow them to reach the amount of the pension exclusion. The sum of the pension exclusion and the additional exclusion may exceed the pension exclusion if the recipient is ineligible to receive Social Security retirement payments. NJ Statutes 54A-6-15.   Income limits (added by legislation in 2005) end the exclusion for joint filers with more than $100,000 in income and single filers with more than $50,000.
NM: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated from all exempt sources. The exclusion is fully phased out for incomes that exceed $51,000.
NC: Amounts indicated are a retirement income exclusion; the total exclusion may not be more $4,000 single/$8,000 filing jointly from all exempt sources. Certain retirement income beneficiaries who had five years of service credit before 1989 may be exempted from state income tax on their retirement benefit.
OH: A retirement income tax credit of as much as $200 is allowed, depending on income. A senior citizen tax credit of $50 per tax return is allowed to filers of 65 or older. A one-time tax credit is available for lump-sum distributions to people over 65: $50 multiplied by remaining life expectancy.
OK: Effective for tax year 2005 and thereafter, pursuant to State Question 713, approved by the voters on November 2, 2004.
OR: Tax credit of up to 9 percent of taxable pension income is available to recipients of pension income, including most private pension income, whose household income was less than $22,500 for single filers and $45,000 for married filing jointly and who received less than $7,500/$15,000 in SS or RR benefits. The credit is the lesser of tax liability or 9 percent of taxable pension income. Some federal pension income is exempt if the beneficiary was employed by the federal government before October 1, 1991.
SC: Each taxpayer over 65 is entitled to an income exemption of as much as $15,000 ($30,000, married filing jointly) less the retirement income exemption claimed.
TN: State income tax applies only to dividend and interest income. Persons 65 and older may exclude $16,200 single, $27,000 married filing jointly.
UT: Previous provisions in Utah (replaced as of tax year 2008): each taxpayer over 65 is entitled to an income exemption of $7,500 ($15,000 married filing jointly) reduced by 50 percent of federal AGI, plus 50 percent of any lump-sum distribution reported as federal income, plus federal tax-exempt income in excess of $25,000 for a single filer or $32,000 married filing jointly. For taxpayers under 65, the exemption caps for qualifying retirement income are $4,800 single and $9,600 married filing jointly.
VA: Amounts indicated are a retirement income exclusion; the total exclusion may not be more than indicated. The exclusion applies to all income.
WV: Each taxpayer over 65 can claim an $8,000 exemption, from which the pension exclusions noted in the table must be deducted. West Virginia also created an income exclusion to benefit persons who retired under private sector defined benefit plans that have failed to provide benefits as originally scheduled, with the amount of the benefit based upon the loss of potential income. This benefit is in effect through tax year 2006. It is not in effect for tax year 2007 or subsequent years.
WI: State and local pensions and federal civilian and military pension income exemptions exist for those who retired before January 1, 1964 or who receive a pension benefit from an account established before that date. A renewed military retirement pension benefit enacted in 2001 became effective on January 1, 2002. 2007 legislation provided for the broader $5,000 exemption , for filers with an AGI of less than $15,000 (single) or $30,000 (joint), first effective for tax year 2009.