Today TaxMama hears from Marilyn in California, who tells us. “ I have a client who is a resident of Maine and receives retirement income from CA (PERS or STRS). Does he have to pay state tax on that in CA and in Maine?”
Dear Marilyn,
Once upon a time, states, especially California, aggressively pursued collecting taxes on pensions earned within their borders. All that changed with one of the tax acts in 1995 (Public Law 104-95). States are no longer permitted to tax the pensions of folks who do not live there.
They may not do that anymore. States may tax pensions received within their borders, though.
Here’s a table I found that lists how states treat out of state government pensions received by their residents. The link is in the Resource Box below.
Incidentally, Maine actually has a $6,000 exemption on out of state pensions.
And remember, you can find answers to all kinds of questions about retirement income and other tax issues, free. Where? Where else? At TaxMama.com.
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- State of Mass :: They put together a table showing how states treat government pensions
- Pillsbury Madison & Sutro llp article :: Public Law 104-95
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