TAX EXEMPTION NOTES

Policies vary widely from state to state. Some specific factors to be aware of are highlighted in the list below. However, it’s important to weigh the benefits of each state’s practices in light of your personal financial situation.

Arizona: Up to $2,500 of retired pay/survivor benefits are exempt.

Arkansas: Up to $6,000 of retired pay/survivor benefits are exempt.

Colorado: $20,000 exemption for retirees ages 55 to 64, $24,000 if over 65.

Connecticut: 50 percent of retired pay/survivor benefits are exempt.

Delaware: $2,000 exemption for retirees under 60, $12,500 if 60 or older.

District of Columbia: $3,000 exemption for re- tirees 62 or older. No survivor benefit exemption.

Georgia: $35,000 exemption for retirees ages 62 to 64, $65,000 if 65 or older.

Idaho: $30,396/$45,594 (single/married filing jointly) exemption for retirees age 65 or older (disabled and 62 or older).

Indiana: $5,000 exemption for retirees/survi- vors age 60 or older.

Iowa: $6,000/$12,000 exemption for retirees single/married age 55 or older.

Kentucky: No tax if retired before Jan. 1, 1998. $41,110 exemption if retired after Dec. 31, 1997.

Maine: $10,000 exemption for retired pay. Maryland: $5,000 exemption for retired pay.

Missouri: For 2015, 90 percent of military re- tirement is exempt. On Jan. 1, 2016, 100 percent of military retirement pay will be exempt.

Montana: $3,900 maximum exemption if fed- eral adjusted income is $32,480 or less.

Nebraska: Starting in 2015, military retirees may make a one-time election within two calendar years after retirement date: choose to exclude 40 percent of military retirement benefit income for seven consecutive taxable years or 15 percent of military retirement benefit income for all taxable years beginning with the year the retiree turns 67.

New Mexico: State offers low- and middle- income exemption. Maximum exemption is $2,500. To qualify, adjusted gross income must be $36,667 or less (single filers), $27,500 or less (married filing separately), or $55,000 or less (married filing jointly or head of household).

North Carolina: Retired pay and survivor ben- efits exempt if retiree had five or more years of creditable service as of Aug. 12, 1989; others may take $15,000 for married filing jointly, $12,000 head of household, or $7,500 for single or married filing separately.

Oklahoma: Military retirees may exclude the greater of 75 percent of their retirement ben- efits or $10,000 (but not to exceed the amount included in their federal adjusted gross income).

Oregon: If all military service occurred before Oct. 1, 1991, retirement pay is 100-percent ex- empt. If all service occurred after Oct. 1, 1991, then none is exempt. If service occurred both before and after Oct. 1, 1991, retirees must compute the percentage of exempt retired pay, which will remain the same from year to year. Divide months of service or points earned before Oct. 1, 1991, by total months of service, and round the percentage to three places (for example, 0.4576 would be 45.8 percent).

South Carolina: Below age 65, up to $3,000 is exempt. If 65 or older, up to $10,000 is exempt.

Utah: Below age 65, 6 percent of retired pay (or $288, whichever is less) may be taken as a tax credit. If 65 or older, may claim $450/$900 tax credit (single/married), subject to income- eligibility limits ($16,000 for married filing separately, $25,000 for singles, or $32,000 for married filing jointly).

Virginia: Retirees age 65 and older can de- duct up to $12,000 a person of retired income, subject to income eligibility limits, reduced $1 for every $1 that federal adjusted gross income exceeds $50,000 (single filers) or $75,000 (married filers).

West Virginia: $2,000 exempt, plus an ad- ditional decreasing modification for military retirement up to $20,000.

State laws are subject to change; contact your state’s department of veterans affairs for up-to-date information.

NOVEMBER 2015 MILITARY OFFICER 69

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