Military Officer - November 2007 - (Page 43)

chaptersinaction taxpayers and maximum deduction limits for those who draw both Social Security and public pension beneﬁts. However, Frederick views the legislation as a quantum leap forward. “There is more to be done, such as removing the age-62 limit and getting the six-year phase-in time accelerated,” says Frederick, who estimates he’ll save $1,600 a year when the bill is fully implemented. “We’re going to develop a plan and strategy to work toward these goals.” Council leaders in Maine, Minnesota, Nebraska, and New Mexico say servicemembers bypass their states when they retire and instead settle in states that either totally exempt military retired pay or have no state income tax. Others opt to live in states that exempt a portion of retired pay from income taxation. (See chart below.) In Minnesota and Nebraska, council and chapter leaders have enlisted support from high-tech employers, some of which have DoD contracts and might use the training, leadership skills, and security clearances servicemembers possess. Col. Joe DeCarlo, USAF-Ret., is a member of the Heartland of America Chapter. As the only MOAA chapter in Nebraska, it functions as a state council. In March, DeCarlo testiﬁed before the state’s revenue committee and cited how military retirees could help ﬁll Nebraska’s skilled labor shortage. He also touted the beneﬁts servicemembers bring to states where they retire. YOUR OPINION How does your state’s taxation — or lack of taxation — of retired pay for servicemembers and their survivors affect you? We want to hear from you. Visit www .moaa.org/discussion and scroll down to State Taxation of Retired Pay to tell us what you think. An attainable goal The Missouri Council of Chapters is one of many MOAA state councils that are working with coalitions in their state to fully exempt military retired pay from state income tax. Joint MOAA state council and coalition efforts in New Jersey and North Carolina resulted in military retired pay and SBP payments being exempted from state income tax, while a joint effort in Georgia won a series of increases in the amount of military retired pay that could be exempted from taxation. “Being part of a coalition was important,” says New Jersey Council of Chapters member Lt. Col. Ray Russell Jr., USAF-Ret. “We also looked at surrounding states that exempted military retired pay. Both had seen an increase in their retired military population, while New Jersey was experiencing a decrease.” “They bring their own health care program with them, and they often are in their peak earning years and have good incomes, which are fully taxable by the state,” says DeCarlo. “Most of their spouses also work and have valuable skills, which contributes to the economy and the tax base.” Lessons learned Although MOAA council members join coalitions in their states, lobby heavily, and give compelling testimony, leaders say it’s difﬁcult to enact How does your state rate? MOAA chapter members are working to pass legislation that would exempt retired pay in each state. Here’s the breakdown of which states already exempt retired pay. States that exempt all military retired pay Alabama Hawaii Illinois Kansas Kentucky* Louisiana Massachusetts Michigan** Mississippi Missouri New Jersey New York North Carolina Pennsylvania Wisconsin Military retirees add value The retired military population in Maryland and New Mexico also is decreasing, according to council leaders. “New Mexico has lost 30 percent of its military retirees [in the past] 10 years, because it doesn’t exempt military retired pay from state income tax,” says New Mexico Council President Col. Ron Baker, USAF-Ret. States with no income tax Alaska Colorado Florida Nevada South Dakota Texas Washington Wyoming States that tax only dividend and interest income New Hampshire Tennessee * Full exemption for people who retire before Jan. 1, 1998; for those who retire after this date, partial exemption. ** Exempts USPHS and NOAA retired pay as federal employment. Full exemption for those in the uniformed services as of Dec. 31, 1963, or those who were a member of a federal retirement system on Dec. 31, 1963, then retired at a later date; or those who retired from federal retirement system before Jan. 1, 1964. NOVEMBER 2007 MILITARY OFFICER 43 http://www.moaa.org/discussion http://www.moaa.org/discussion

Table of Contents Feed for the Digital Edition of Military Officer - November 2007

Military Officer - November 2007 Contents From the Editor President’s Page Your Views MOAA Directory Rapid Fire Washington Scene Chapters in Action Financial Forum Ask the Doctor Cover Story: Commanding the Corps With Love, From Home Financial Guidebook Financial Tuneups Banking on Your Time Pages of History MOAA Scholarship Recipients Faces of MOAA MOAA Scholarship Donors Member Books Advertising Index MOAA Calendar Sounding Taps MOAA Member Services Encore

Military Officer - November 2007

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