Myrtle Beach Message Board
http://www.funbeaches.com/forum/

Taxing Out of State Pensions?
http://www.funbeaches.com/forum/viewtopic.php?f=94&t=14168
Page 1 of 1

Author:  Sun n' Fun [ Fri Feb 08, 2013 8:06 am ]
Post subject:  Taxing Out of State Pensions?

I tried deciphering the info I read on my own and am so confused :BandHead:


"Beginning with the first year you receive retirement income and until you turn 65, you may take an annual deduction of up to $3,000 from retirement income. The retirement deduction increases to $10,000 at age 65. You may take this deduction for income received from any qualified retirement plan, such as IRAs, government pension plans, Keough plans and private sector pensions. If both spouses receive retirement income, each spouse is entitled to an individual deduction. At age 65, all residents are eligible for a deduction of up to $15,000 from income, regardless of the source. This deduction must be offset by any deduction claimed for retirement income."


So what the heck does the above mean? How much does SC actually tax an out of state pension percentage wise?

Any help would be so appreciated?

Author:  Hondo [ Fri Feb 08, 2013 8:41 am ]
Post subject:  Re: Taxing Out of State Pensions?

Emmy, take a look here and see if this helps explain how retirement benefits would be taxed:
http://www.sctax.org/NR/rdonlyres/074EA7B9-42BC-4744-9D34-F8FC70B28F44/0/INFORETIREES_SNR.pdf

It looks like the SC income tax rates range from 0% to 7%. So, the applicable tax would depend on the taxable income and the resulting tax bracket.
Quote:
Q. What are the tax rates?
A. South Carolina imposes an income tax on individuals at graduated rates ranging
from 0% to a maximum rate of 7%. Income tax brackets are adjusted annually for
inflation.


Jack

Author:  Sun n' Fun [ Fri Feb 08, 2013 8:55 am ]
Post subject:  Re: Taxing Out of State Pensions?

Thanks for the info Jack.
So, it looks as if anything over 11,000 is $456 and then a 7% tax bracket on anything over the 11,000...if I am understanding what I read correctly.

Author:  Hondo [ Fri Feb 08, 2013 10:21 am ]
Post subject:  Re: Taxing Out of State Pensions?

OK, here's my best GUESS. If you have $25,000 in retirement income, take the $3,000 deduction off which leaves $22,000 as taxable. From the SC tax tables this is taxed at 7% less $476. So, $22,000 x .07 = $1,540 less $476 = $1,064 tax owed.

Once you reach age 65, take the $15,000 deduction off which leaves $7,000 as taxable. This puts you in the lower tax bracket of 4% less $140. So, $7,000 x .04 = $280 less $140 = $140 tax owed.

This assumes you have no other taxable income and there are no other deductions or exclusions. Emmy, I have no experience with this, I'm just crunching numbers after a quick look at the SC tax tables. So, please don't rely on anything I say. :lol:

Jack

Author:  Sun n' Fun [ Fri Feb 08, 2013 1:25 pm ]
Post subject:  Re: Taxing Out of State Pensions?

I am looking at it the same way as you Jack. Thanks so much!

Author:  Deanna [ Fri Feb 08, 2013 3:27 pm ]
Post subject:  Re: Taxing Out of State Pensions?

That made my brain hurt

Author:  Hondo [ Fri Feb 08, 2013 3:55 pm ]
Post subject:  Re: Taxing Out of State Pensions?

Deanna wrote:
That made my brain hurt

Thanks goodness we don't have to be concerned about this in Tennessee with no income tax!

Emmy, would New York also try to tax that retirement income? Some time ago I heard that NY (and other Northeast states) were trying to tax retirement income from New Yorkers who retired and moved to Florida (with no income tax). These folks had accumulated tax-free retirement accounts (IRA's, 401K's, etc.) while living and working in New York. Then when they retired and permanently moved to Florida, NY wanted to tax their retirement withdrawals. I never did hear how this turned out.

EDITED: Never mind. I found the answer:
Quote:
Federal Law Prevents States From Taxing Retiree Income Across State Lines

Federal tax law now prohibits states from taxing most retirement income of their former residents. The so-called "source tax" on pension plan distributions had become a popular method for states with high income tax rates to tax pension income received by employees who had worked for an employer in the taxing state but who lived in another state after retirement. For example, New York State would tax a former New York resident who had moved to Florida, or a New Jersey resident who had worked in New York, on pension income received from a New York employer.

Author:  Sun n' Fun [ Fri Feb 08, 2013 4:20 pm ]
Post subject:  Re: Taxing Out of State Pensions?

Yeah that is such good news!!!

Now even better news...I called the tax assessors office for Horry County and our land/school taxes for the YEAR combined once we become full time residents is...(drum roll please) $298.00

Can you believe that??? Here in NY we play about 200X that amount.

Author:  patrish [ Fri Feb 08, 2013 9:49 pm ]
Post subject:  Re: Taxing Out of State Pensions?

Jack, thanks so much for taking the time to do this research. I'm even thinking of giving you a raise. Let's see....3x0.... :clown:

Author:  beady [ Fri Feb 08, 2013 10:33 pm ]
Post subject:  Re: Taxing Out of State Pensions?

Emmy,
when we left New York Clifton Park area in 2010 we paid $4,500 for
property taxes we moved here and bought a brand new home and
after 3 years in May we now only pay $506.00 total . Major difference
in NY we had no State Tax on my Military Pension here we only
can take the $3,000 deduction oh well we still happy as clams..... :lol:

Page 1 of 1 All times are UTC - 5 hours [ DST ]
Powered by phpBB® Forum Software © phpBB Group
http://www.phpbb.com/