CHANGES FOR

Tax Year 2006


State Tax on Federal & Other Retirements




State (Only) Sales Tax by Percent

Idaho state sales and use tax was increased to 6% on October 2006

States with No Personal Income Taxes:

Alaska

Florida (1)

Nevada
New Hampshire (2)

South Dakota

Tennessee (3)
Texas

Washington

Wyoming--May have been left off the 2005 Tax Year Listing

States Exempting all Federal Civil Service Income:

No Changes

Other Exemptions:

Arkansas: In addition to the $6,000 exemption provided for distributions received from employment-related pension plans, the cost recovery adjustment calculated pursuant to IRC 72, using the simplified worksheet found in the federal return, is applicable to Arkansas returns filed for 2003 and subsequent years. The total exemption allowable for employer-sponsored pension plans and/or IRAs is $6,000 per taxpayer. All residents 65+ receive an additional $22 exemption.

California: Personal and age 65+ exemption of $91 each.

Florida: The exemption for individual and joint filers for Florida Intangible Tax is, respectively, $250,000 and $500,000. Every natural person is entitled each year to an exemption of the first $250,000 of the value of property otherwise subject to the annual tax. In addition, a husband and wife filing their Intangible Tax return jointly, shall have an exemption of $500,000. For 2006, intangible assets are taxed at 50 cents per thousand dollars of taxable value. Florida does not tax unearned income such as interests, dividends, etc. (For tax year 2007, Florida's Annual Intangible Personal Property Tax has been repealed effective January 1,

2007.

Maine:  Additional Standard Deduction for Age and/or Blindness:  Unmarried (single or head of household)--the additional amount is $1,250 if the individual is 65 or over OR blind; $2,500 if the individual is both 65 or over AND blind.  Married (whether filing jointly or separately) or a qualified Widow(er):  The additional standard deduction is $1,000 if one spouse is age 65 or over OR blind; $2,000if one spouse is 65 or over AND blind; $4, 000if both spouses are 65 or over AND blind.

Maryland: Pension exclusion up to $22,600 for those 65+ or totally disabled, reduced by SS or RR benefits. In addition, all residents 65+ receive a personal exemption of $1,000. Beginning in tax year 2006, exclusion of the first $5,000 of military retirement income received during the taxable year by an individual of any age, or surviving spouse.

Massachusetts: An exemption of $700 is available for individuals who have reached the age of 65 by 1/1/06. This exemption is in addition to the personal exemption of $3,575 (single), $5,525 (head of household) and $7,150 (married/joint filing). SS and VA disability are non-taxable.

Michigan:  Public pension income from all sources (city, county, state or federal) is exempt from the Michigan income tax are SS benefits.  Private retirement income included in AGI is deductible up to $30.920 (single) and $81,840 (joint). The allowable private pension deduction amount is reduced by the amount of exempt public pension income. Retirement income does not include payments made before the individual was eligible to retire under the provisions of the plan. Such payments are taxable. Seniors (65+) are allowed an additional exemption of $2,100 for tax year 2006. A deduction for taxpayers ages 65 and over is allowed for income from dividends, interest and capital gains included in AGI up to $9,128 (single) and $18,255 (joint). The allowable deduction is reduced by all pension deductions from AGI, public and private.

New Mexico: Exemptions for all residents 65+. $8,000 for those with AGI less than $18,000; exemption reduces as income increases--no exemptions above $51,000 for married filing jointly, $25,500 for married filing singly, and $28,500 filing single.

Oklahoma: Federal, military and OK government retiree exclusion of $10,000. Military retiree exclusion is 50% of benefit or $10,000. Whichever is greater. $10,000 other pension exclusion with modified AGI limit $37,500 (single) or $75,000 (joint). Additional $1,000 exemption for legally blind or 65+ under certain income limits or legally blind.  Oklahoma tax treatment of federal annuities will be liberalizes as of 2007.

Oregon: Additional standard deduction for 65 plus; $1,200 (single and head of household), $1,000 each spouse 65 plus (married filing jointly, married filing singly, and qualified widow(er)). Credit for long term care insurance premiums

Tennessee: Persons 65+ are tax-exempt, if total annual income, from any and all sources, is $16,200 or less (single), or $27,000 or less (joint-no matter which spouse is 65+). "Hall income tax" does not apply to income from any type of annuity.  For further information go to:           http://www.tennessee.gov/revenue/tntaxes/indinc.htm

Virginia: The maximum age deduction of $12,000 for 65 plus is subject to income limitations based on the individual's adjusted federal AGI.  The age deduction will be reduced $1 for $1 that the adjusted federal AGI exceeds $50,000 for single filers or $75,000 combined total for married individuals filing joint or separate returns. Additional $800 personal exemption if 65 plus.  Virginia exempts SS and Tier I railroad benefits from taxation.

States not listed had no changes from tax year 2005 to tax year 2006.