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Source Taxation 2006/08/22 06:57
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Karma: 0
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On January 10, 1996 the President signed into law P. L. 104-95 which
PROHIBITS most source taxation of pensions. Before that some states
such as California and Minnsesota would tax people upon their pensions
AFTER they moved to another state of residence. The bill protects from
source taxation all pension income or other retirement distributions
received from IRS Sec 401(a), trusts exempt from taxation under
IRC Sect 501(a), simplified IRC Sec. 408(k) plans, IRC Sec. 403(a)
annuity plans, IRS Sec. 403(b) annuity contracts, IRS Sec 7701(a)(37)
individual retirement plans, IRS Sec. 457 deferred compensation plans,
IRC Sec 414(d) government plans, and IRC Sec. 501(c) trusts.
This covers virtually all pension and retirement plans. So, after a taxpayer
actually moves to a new state of residence, he or she is NOT required to
pay tax on his or her pension or retirement income to the old state of residence.
I am sure that the states know this now, but some taxpayers or
tax preparers may not.
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PRobert (User)
Senior Boarder
Posts: 18
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Re: Source Taxation 2006/08/24 16:08
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Karma: 0
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When somebody move out of a state, they are no longer a resident of that state. May be resident/part resident for the first year. But, after that they should not taxed.
IMO , taxing pension income is a crime.
[quote="supeheterdyne"]On January 10, 1996 the President signed into law P. L. 104-95 which
PROHIBITS most source taxation of pensions. Before that some states
such as California and Minnsesota would tax people upon their pensions
AFTER they moved to another state of residence. The bill protects from
source taxation all pension income or other retirement distributions
received from IRS Sec 401(a), trusts exempt from taxation under
IRC Sect 501(a), simplified IRC Sec. 408(k) plans, IRC Sec. 403(a)
annuity plans, IRS Sec. 403(b) annuity contracts, IRS Sec 7701(a)(37)
individual retirement plans, IRS Sec. 457 deferred compensation plans,
IRC Sec 414(d) government plans, and IRC Sec. 501(c) trusts.
This covers virtually all pension and retirement plans. So, after a taxpayer
actually moves to a new state of residence, he or she is NOT required to
pay tax on his or her pension or retirement income to the old state of residence.
I am sure that the states know this now, but some taxpayers or
tax preparers may not.
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The administrator has disabled public write access. |
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