States that tax retirement income (55, pension, move, social security)

[Bill55AZ]

We live in 2 states, based on locations of grandchildren, Utah and Arizona. Seems that Utah isn't as generous as AZ when taxing retirement income. Utah taxes social security, AZ does not. Utah has a flat 5% rate on the smallest of incomes, AZ rates are graduated and you don't pay high rates on small incomes.
Residency requirements for most states are based on working people, not retirees. It seems to be better for us to claim AZ for our "home state".
So we file federal income taxes using our AZ address and register every vehicle in AZ except the car we keep in Utah year round.
There doesn't seem to be enough up to date and clear source of information on retiree issues related to state residency requirements, so we are hoping that we never get stopped by police in Utah in a car with Utah plates and have to show an AZ drivers license. Even police can't keep up with different laws on these topics.
Anybody know of a really good source of info related to retirees, multiple state residencies, etc.?

[mg420]

Taxes by State

[StealthRabbit]

On the car, check with UT DMV, There are provisions for 'snowbirds' (part-time residents) There should not be an issue, as long as you have a current registration and insurance card.

States vary on residency requirements for taxing. SD is the most generous requiring only one night stay to benefit from income tax free status. Many RV'rs declare SD, but register vehicles in MT (no sales tax). Not that I would ever do such a thing If I keep my primary residence in WA, all my vehicles will have to move to another state as 'boarding school', due to WA (& OR) adopting CARB.

[MotleyCrew]

We just met with some clients from Sun City AZ. If we were to wish to escape the higher property tax areas in AZ, that would be one city we would consider. Their auto insurance is far less as well.

[Bill55AZ]

Originally Posted by MotleyCrew

We just met with some clients from Sun City AZ. If we were to wish to escape the higher property tax areas in AZ, that would be one city we would consider. Their auto insurance is far less as well.

They don't have to pay the schools part of property taxes, but they do pay HOA fees and have all the associated restrictions related to HOA rules.

My house in Peoria, AZ has no HOA, but does have city restrictions against parking RV's, boats, trailers, etc. anywhere but in the back yard behind a fence. Taxes are almost 2K per year on a house worth 200K. Our Utah house is worth twice the AZ house, but taxes are only a few dollars more than the AZ house.

We will have 2 houses so we don't have to live with the kids/grandkids, that much is predetermined. Only issue that we can do anything about is choose which state gets our income tax...

[forest beekeeper]

A lot of folks will quote the: Retirementliving.com site.

I got frustrated with it, as it is not a complete picture.

Something to consider is that while many states do taxes your pension, if they have a high 'deduction' and 'exemption' then it is likely that your pension income may be underneath the minimum to even qualify to pay income taxes.

The state where we decided to retire to; looks like a high tax state, at first glance.

However my pension is not taxed here. We have part-time incomes too and we have rental income, together they are not enough to get us taxed.

We own almost 50 acres and our property taxes have been less than $50/year.

I am not sure that there is a really good website that shows how retirement incomes are taxed.

[Bill55AZ]

Originally Posted by forest beekeeper

A lot of folks will quote the: Retirementliving.com site.

I got frustrated with it, as it is not a complete picture.

Something to consider is that while many states do taxes your pension, if they have a high 'deduction' and 'exemption' then it is likely that your pension income may be underneath the minimum to even qualify to pay income taxes.

The state where we decided to retire to; looks like a high tax state, at first glance.

However my pension is not taxed here. We have part-time incomes too and we have rental income, together they are not enough to get us taxed.

We own almost 50 acres and our property taxes have been less than $50/year.

I am not sure that there is a really good website that shows how retirement incomes are taxed.

I think you are right....lots of info left out....
I will be doing the switchover, tho, from Utah to AZ. So far, it appears that for retirees, you can get away with things that working age people cannot.

[forest beekeeper]

Originally Posted by Bill55AZ

I think you are right....lots of info left out....
I will be doing the switchover, tho, from Utah to AZ. So far, it appears that for retirees, you can get away with things that working age people cannot.

It is about the pension, not so much the age of the person.

I got my pension at 42, and was able to begin enjoying the benefits of retirement then.

[MadManofBethesda]

Originally Posted by Bill55AZ

We will have 2 houses so we don't have to live with the kids/grandkids, that much is predetermined. Only issue that we can do anything about is choose which state gets our income tax...

That's interesting that you get to decide. In Maryland, the residency statute states that you are a Maryland resident if you reside here for more than 6 months. Period.

[Tesaje]

Originally Posted by MadManofBethesda

That's interesting that you get to decide. In Maryland, the residency statute states that you are a Maryland resident if you reside here for more than 6 months. Period.

It varies quite a bit from state to state. I understand SD only requires one day a year residency to establish residency. Other states will insist that any income received from within that state is taxable by the state regardless of residency.

that site does a poor job on the MD taxes making it look significantly better than it really is. I don't trust it at all because of that.