MOAA State-by-State Assessment

Benefits Criteria Veteran & Retiree

Military retirement pay/survivor benefits exempt from state taxa- tion: Some states allow military re- tirees to exempt a specific amount, a percentage, or full military retired pay from taxation. Most states determine what in- come is subject to taxation based on a fi ler’s federal tax return. Retirees who entered the military before Sept. 24, 1975, and servicemembers receiving disability retirement based on combat injuries or who could receive disabil- ity payments from the VA are covered by laws giving disability broad exemp- tion from federal income tax. Spouses also might be able to receive exemp- tions for their survivor benefi ts. Most military retired pay based on

service-related disabilities is exempt from federal income taxation, but there is no guarantee of state tax ex- emption. Consult a tax expert in your state regarding your specifi c situation. A green dot on the chart on the

following page indicates retired pay or survivor benefi ts are 100-percent exempt — with the exception of Mis- souri, where 90 percent of retired pay is exempt, with the exemption increasing to 100 percent in 2016.

66 MILITARY OFFICER NOVEMBER 2015 Yellow indicates some exemption,

even if it’s so limited some would argue the state should be red. Red indicates no exemption.

Estate and inheritance taxes: Feder- al estate tax is not owed until an estate is valued over $5.4 million. However, some states with estate taxes have much lower exemption amounts. Inheritance taxes are assessed based on the value of what a benefi - ciary receives. The IRS explains the diff erence in an article at www.irs .com/articles/inheritance-tax-vs-es tate-tax. (Note the linked article dates from 2010; in 2015, the number of states with estate taxes has increased to 15, plus the District of Columbia, while only six states tax inheritances.) A green dot indicates a state does

not have an estate or inheritance tax. Red indicates the state does.

Veteran treatment courts: These programs provide services such as treatment and mentoring to veter- ans in the criminal justice system. According to DoD’s State Liaison Office, they are “an innovative and effective means for veterans with

mental health and substance addic- tion to obtain treatment and services to resolve outstanding criminal of- fenses and stabilize their lives.” Learn how MOAA chapter mem- bers support veteran treatment courts in “Camaraderie With a Purpose,” October 2015, and Chapters in Action, September 2014.

Veterans preference in private hir- ing:Most people are aware veterans receive preference when applying for federal employment. However, private-sector employers who wish to implement a veteran employment preference might be vulnerable to claims of discrimination. Under Title VII, Section 11 of the Civil Rights Act of 1964, veteran em- ployment preference may be autho- rized by state statute, which protects private employers from being sued under the act. However, at this point, nearly half the states lack a statute authorizing veterans preference. A green dot indicates a state of-

fers veteran treatment courts or has a statute authorizing veterans employment preference; dicates it does not.

red in-