Table 1
State Income Tax Treatment of Social Security Benefits and Pension Income, 1996

---------Amount of Exemptions---------

State

Is Social Security Tax Exempt?

Private Exemption

Military Exemption

Federal Exemption

State and Local Exemption

Age Minimum for Pension Exclusions?

Income Qualifying Restrictions for Pension Exclusions?

Alabama

Yes

None/Full

Full

Full

Full

No

No

Arizona

Yes

None

$2,500

$2,500

$2,500

No

No

Arkansas

Yes

$6,000

$6,000

$6,000

$6,000

No

No

California

Yes

None

None

None

None

N/A

N/A

Colorado

No

$20,000

$20,000

$20,000

$20,000

Yes

No

Connecticut

No

None

None

None

None

N/A

N/A

Delaware

Yes

$2,000/ $3,000

$2,000/ $3,000

$2,000/ $3,000

$2,000/ $3,000

No

Yes

District of Columbia

Yes

None

$3,000

$3,000

$3,000

Yes

No

Georgia

Yes

-------------------------- See endnote --------------------------

Yes

No

Hawaii

Yes

Full/Part

Full

Full

Full

No

No

Idaho

Yes

None

$14,976

$14,976

$14,976/ None

Yes

No

Illinois

Yes

Full

Full

Full

Full

No

No

Indiana

Yes

None

$2,000

$2,000

None

Yes

No

Iowa

No

$3,000

$3,000

$3,000

$3,000

Yes

No

Kansas

No

None

Full

Full

Full

No

No

Kentucky

Yes

See endnote

Full

Full

Full

No

No

Louisiana

Yes

$6,000

Full

Full

Full

Yes

No

Maine

Yes

None

None

None

None

N/A

N/A

Maryland

Yes

$14,400

$14,400

$14,400

$14,400

Yes

Yes

Massachusetts

Yes

None

None

Full

Full

No

No

Michigan

Yes

$31,920

Full

Full

Full

No

No

Minnesota

No

-------------------------- See endnote --------------------------

Yes

Yes

Mississippi

Yes

Full

Full

Full

Full

No

No

Missouri

No

None

$6,000

$6,000

$6,000

No

Yes

Montana

No

$3,600

$3,600

$3,600

$3,600

No

Yes

Nebraska

No

None

None

None

None

N/A

N/A

New Jersey

Yes

$7,500

$7,500

$7,500

$7,500

Yes

No

New Mexico

No

-------------------------- See endnote --------------------------

Yes

Yes

New York

Yes

$20,000

Full

Full

Full

Yes

No

North Carolina

Yes

$2,000

$4,000

$4,000

$4,000

No

No

North Dakota

No

None

$5,000

$5,000

$5,000/ None

Yes

No

Ohio

Yes

-------------------------- See endnote --------------------------

Oklahoma

Yes

None

$5,500

$5,500

$5,500

No

No

Oregon

Yes

-------------------------- See endnote --------------------------

Pennsylvania

Yes

Full

Full

Full

Full

Yes

No

Rhode Island

No

None

None

None

None

N/A

N/A

South Carolina

Yes

$3,000/ $10,000

$3,000/ $10,000

$3,000/ $10,000

$3,000/ $10,000

No

No

Utah

No

-------------------------- See endnote --------------------------

No

Yes

Vermont

No

None

None

None

None

N/A

N/A

Virginia

Yes

-------------------------- See endnote --------------------------

Yes

No

West Virginia

No

-------------------------- See endnote --------------------------

Wisconsin

No

None

None/Full

None/Full

None/Full

No

No

Note #1: N/A stands for not applicable.
Note #2: Seven states -- Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming -- are excluded because they have no personal income tax.
Note #3: Two states -- New Hampshire and Tennessee -- are excluded because they have limited income taxes.
Sources (for Table 1 and accompanying endnotes): State income tax forms and telephone survey of State Department of Revenue offices.

prepared by David Baer
Public Policy Institute
American Association of Retired Persons

(Presented here with the permission of the AARP)