Pension Tax

apopj · February 20, 2017

Hello all,

The wife and I are planning on joining the class of 2018, already selling the house, etc. My question is, we both receive a pension based in the State of Ohio. Hers is Ohio State Employees Retirement System, mine is Ohio Public Employees Retirement System. If we take domicile residence in a no income tax state, will we still have to pay income tax to Ohio? I can call each system and ask, but not sure if I would get a straight answer so thought maybe someone else has done this....

Thanks, Jeff and Diane HouselessNotHomeless

Kirk W · February 20, 2017

I doubt it, but I would start by asking the pension administrations themselves as I believe that they would be honest with you and probably have dealt with the issue before. Even more important would be the effect that it could have upon any health benefits that come from your pensions. Some of those benefits are tied to your state of residence so be careful in that area as well.

Each state has their own set of income tax codes and most do apply income taxes to money that is considered to be earned inside of that state. Since the pensions come from Ohio employment, it is possible that they could withhold taxes based upon that logic, just as taxes would be due Ohio on the income if you were to keep your house and rent it to someone.

weaverworks · February 20, 2017

As long as you are no longer an Ohio resident you would not pay Ohio income tax. Residency is the key!

Ronbo · February 20, 2017

California was going after retirees living out of state. They had to sue to get them to stop.

Big Greg · February 20, 2017

I get a small pension from the MI Public School Employees Retirement System, we "moved" our residency

to SD 3 or 4 years ago. SD has no state tax (don't even have any paperwork or forms to submit) and

I don't submit MI tax forms either since we changed our residency. The only tax I file is federal. Greg

LFDR3116 · February 20, 2017

I did a quick search and found: Ohio Department of Taxes

or non-Ohio residents, retirement income, pension income and annuity income are not subject to Ohio income tax regardless of the location where the taxpayer received the income. For example, a full-year Indiana resident who spends part of the year in Ohio and part of the year in Indiana and who receives a pension is not liable for Ohio income tax on that income. This is true regardless of where the taxpayer worked in prior years to earn the pension.

Mr. Camper · February 20, 2017

Both my wife and I receive a FL pension for the time we taught there. We moved to AR and taught there for many years and became vested there as well. We get a retirement payment from them as well. FL has no state income tax so we have nothing to pay there. AR does and we pay that income tax, even if we eventually move out of state. Sounds to me that each state sets up its own rules.

Weffy · February 21, 2017

We live in Missouri and I receive a pension from G.M. We still have to pay state tax, it all depends on your state of residency

Pappy Yokum · February 21, 2017

California was going after retirees living out of state. They had to sue to get them to stop.

Like to see the documentation on that one!

CalPERS retiree.

Numerous of my previous co-workers, retired from the same (state retirement) system residing in:

Oregon, Washington, Colorado, Arkansas, Texas, Arizona Nevada..

"We" are mutually connected by retiree newsletters, e-mail "updates", etc.

NEVER heard of anyone having any issues after perm residency in another state.

Of course - there is always a first??

.

Common knowledge (and common sense) - *if* you are still a CA resident, CA will be after state income tax.

Ronbo · February 21, 2017

It was in the 90s when we lived in Nevada.

http://articles.latimes.com/1995-02-26/business/fi-36443_1_state-income-taxes

Second paragraph of this one

http://finance.zacks.com/california-pension-income-taxable-outside-california-8191.html

Barbaraok · February 21, 2017

Like to see the documentation on that one!

CalPERS retiree.

Numerous of my previous co-workers, retired from the same (state retirement) system residing in:

Oregon, Washington, Colorado, Arkansas, Texas, Arizona Nevada..

"We" are mutually connected by retiree newsletters, e-mail "updates", etc.

NEVER heard of anyone having any issues after perm residency in another state.

Of course - there is always a first??

.

Common knowledge (and common sense) - *if* you are still a CA resident, CA will be after state income tax.

On Jan. 10, 1996, P.L. 104-95 took effect. This federal law prohibits any state from taxing pension income of non-residents, even if the pension was earned within the state. Before the passage of this law, California, New York and several other states maintained a source tax on pension earned within the state. For example, a California teacher who retired to Nevada would have to continue paying the source tax on her California pension. Thanks to this law, people who earn a pension in California then move out of the state no longer have to pay taxes on these funds to California.

http://finance.zacks.com/california-pension-income-taxable-outside-california-8191.html