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Old 04-05-2015, 09:30 PM
 
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After a person retires, the pension distribution will have state taxes withheld (in most states). But say then that the retiree completely/permanently moves to another state (which also has state income taxes).

In this case, does a retiree have to continue filing non-resident taxes in the former state for the rest of life? And does the retiree have to proactively make periodic tax payments throughout the year to the new home state to avoid penalty for not having any withholding?
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Old 04-05-2015, 09:55 PM
 
Location: Nebraska
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Quote:
Originally Posted by MerriMAC View Post
In this case, does a retiree have to continue filing non-resident taxes in the former state for the rest of life?
No you do not. I get a pension from Kansas and live in Nebraska. I don't state taxes in either state. My wife gets extra withheld from her paycheck to cover me.
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Old 04-05-2015, 11:09 PM
 
Location: SW MO
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Absolutely not. That would constitute a "source tax" which the U.S. Supreme Court declared unconstitutional in the mid-90s. The issue is taxation without representation. If you no longer reside in the state of origin you can't vote in the state's elections.

Last edited by Curmudgeon; 04-05-2015 at 11:34 PM..
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Old 04-05-2015, 11:40 PM
 
2,294 posts, read 1,559,623 times
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Quote:
Originally Posted by MerriMAC View Post
After a person retires, the pension distribution will have state taxes withheld (in most states). But say then that the retiree completely/permanently moves to another state (which also has state income taxes).

In this case, does a retiree have to continue filing non-resident taxes in the former state for the rest of life? And does the retiree have to proactively make periodic tax payments throughout the year to the new home state to avoid penalty for not having any withholding?
In CA I will have to complete withholding forms (state and Fed) but I can indicate to have nothing withheld if I wish.
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Old 04-06-2015, 08:10 AM
 
Location: SoCal
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Quote:
Originally Posted by MerriMAC View Post
After a person retires, the pension distribution will have state taxes withheld (in most states). But say then that the retiree completely/permanently moves to another state (which also has state income taxes).

In this case, does a retiree have to continue filing non-resident taxes in the former state for the rest of life? And does the retiree have to proactively make periodic tax payments throughout the year to the new home state to avoid penalty for not having any withholding?
Depends on which states you're talking about.
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Old 04-06-2015, 08:18 AM
 
1,971 posts, read 2,716,176 times
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Quote:
Originally Posted by MerriMAC View Post
After a person retires, the pension distribution will have state taxes withheld (in most states). But say then that the retiree completely/permanently moves to another state (which also has state income taxes).

In this case, does a retiree have to continue filing non-resident taxes in the former state for the rest of life? And does the retiree have to proactively make periodic tax payments throughout the year to the new home state to avoid penalty for not having any withholding?

I second Berkmere. I have to complete fed and state withholding forms. I simply indicate zero for state withholding. But since my pension distributor in online, I can do it online.

Nine years ago, when I retired moved to another state, I indicated zero for state withholding, and I've never changed it. I do, however, change my fed withholding (upwards, unfortunately) every year.

The first year you retire (just the first year), you will (probably) have to see a (good) tax preparer in your new state of residence, because, more than likely, you'll have to pay some state income tax to your old state and some state income tax to your new state, and that can get too tricky to do yourself. But that is just for the first year.
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Old 04-06-2015, 12:35 PM
 
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Quote:
Originally Posted by Fran66 View Post
I indicated zero for state withholding, and I've never changed it.
Do others who do this proactively make estimated tax payments to their new state throughout the year? If the state tax owed is even something small like $1000, then I will be hit with a steep interest penalty and fine.
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Old 04-06-2015, 02:09 PM
 
8,191 posts, read 11,905,691 times
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Quote:
Originally Posted by MerriMAC View Post
Do others who do this proactively make estimated tax payments to their new state throughout the year? If the state tax owed is even something small like $1000, then I will be hit with a steep interest penalty and fine.
You're worrying about nothing. When you move you just notify your pension administrator to withhold taxes for the new state beginning on the date of your relocation and discontinue your withholding to your former state. That first year you'll have to file tax returns as a partial resident in both states, but then you only file annually in your new location.
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Old 04-06-2015, 03:13 PM
 
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No; you need to notify your pension of the change. Whether you will have to file quarterly or they will withhold depends on the pension system your under as to state taxes.
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Old 04-06-2015, 04:40 PM
 
1,971 posts, read 2,716,176 times
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Quote:
Originally Posted by MerriMAC View Post
Do others who do this proactively make estimated tax payments to their new state throughout the year? If the state tax owed is even something small like $1000, then I will be hit with a steep interest penalty and fine.
Yes. And don't be late. Make them on time. I thought estimated payments dates were 'suggestions' LOL -- and that as long as I paid it all by the end of the year, I was just fine. LOLOLOLOL (What did I know about estimated payments?! ) Well, the penalties and interest (at least in my state) were miniscule, to say the least. Even so, I haven't been late since my state was gracious enough to disabuse of my initial beliefs.

I'm sure your state revenue department has a web site -- just sign up and pay on line. Not a big deal.
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