Can anyone tell me how the taxes work on an out of state pension (Bailey: income)
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Can anyone tell me -
My husband wants to retire when we go down to NC (or SC). Can anyone tell me how the taxes work on an out of state pension. It would be an NJ pension (private - not a state job). What kind of taxes would we pay in NC vs. SC?
Thanks!
Can anyone tell me -
My husband wants to retire when we go down to NC (or SC). Can anyone tell me how the taxes work on an out of state pension. It would be an NJ pension (private - not a state job). What kind of taxes would we pay in NC vs. SC?
Thanks!
I looked this up for my aunt and uncle a while ago. As long as you are in a "qualifying" federal retirement program and you were vested (most likely 5 years of service or more) in it PRIOR to August 12, 1989, North Carolina does NOT tax your retirement (state taxes).
I got this from: http://www.dornc.com/practitioner/individual/bulletins/income_bulletins_05-06.pdf#page=29 (it's a PDF document, so give it a minute to load up) That first paragraph sums it up under the section "V. Subject: Bailey Settlement". If you scroll down to section "3. Qualifying Federal Retirement Systems" (it's about 3 pages down on page #25) you can look for your plan...if it's there, you're golden.
I looked this up for my aunt and uncle a while ago. As long as you are in a "qualifying" federal retirement program and you were vested (most likely 5 years of service or more) in it PRIOR to August 12, 1989, North Carolina does NOT tax your retirement (state taxes).
I got this from: http://www.dornc.com/practitioner/individual/bulletins/income_bulletins_05-06.pdf#page=29 (it's a PDF document, so give it a minute to load up) That first paragraph sums it up under the section "V. Subject: Bailey Settlement". If you scroll down to section "3. Qualifying Federal Retirement Systems" (it's about 3 pages down on page #25) you can look for your plan...if it's there, you're golden.
All of these "qualifying" systems are within the state of North Carolina. I think that you are exempt for a federal pension, but government pensions from other states are subject to tax. I do believe that you get a $4000 deduction though. I don't think that there is any deduction with private pensions. Someone correct me if I am wrong....
All of these "qualifying" systems are within the state of North Carolina. I think that you are exempt for a federal pension, but government pensions from other states are subject to tax. I do believe that you get a $4000 deduction though. I don't think that there is any deduction with private pensions. Someone correct me if I am wrong....
Justpeachee - You're absolutely right on this one! The Bailey Decision only offers a non-taxable pension exemption to individuals with a North Carolina or Federal Pension. Pensions from other states minus the $4000 exemption are taxed at whatever rate that would be applicable as earned income. Social Security is also exempt at the state level.
Yes...sorry I got narrow minded and focused on Fed or NC pension. My uncle works for the Secret Service and I work for the City...so I got one-tracked!
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The Bailey Decision only offers a non-taxable pension exemption to individuals with a North Carolina or Federal Pension. Pensions from other states minus the $4000 exemption are taxed at whatever rate that would be applicable as earned income. Social Security is also exempt at the state level.
