{"id":869,"date":"2016-04-03T13:55:45","date_gmt":"2016-04-03T17:55:45","guid":{"rendered":"http:\/\/www.etax.com\/blog\/?p=869"},"modified":"2016-03-24T13:57:36","modified_gmt":"2016-03-24T17:57:36","slug":"government-pensions-state-tax-rules","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2016\/04\/03\/government-pensions-state-tax-rules\/","title":{"rendered":"Government Pensions: State Tax Rules"},"content":{"rendered":"<p>When it comes to state tax policies, federal legislation exists to protect governmental civil service pensions. Because of this, pensions deriving from state or local governments cannot receive better taxation than Federal civil service pensions. State tax departments are allowed to institute policies that favor their own state pensions over those from another state.<\/p>\n<p>The following states favor their own pensions and provide higher tax savings for <a href=\"https:\/\/www.etax.com\/blog\/2025\/10\/27\/2026-tax-deductions-for-seniors-new-6000-bonus-standard-deduction-hikes\/\">retirees<\/a> with state pensions than they do for pension plans originating from a governmental body out-of-state:<\/p>\n<ul>\n<li>Arizona<\/li>\n<li>Idaho<\/li>\n<li>Kansas<\/li>\n<li>Louisiana<\/li>\n<li>New York<\/li>\n<li>Oklahoma<\/li>\n<li>District of Columbia<\/li>\n<\/ul>\n<p>There are 10 different states in which all Federal, State, and local pension plans are exempt from taxation. They are:<\/p>\n<ul>\n<li>Alabama<\/li>\n<li>Hawaii<\/li>\n<li>Illinois<\/li>\n<li>Kansas<\/li>\n<li>Louisiana<\/li>\n<li>Massachusetts<\/li>\n<li>Michigan<\/li>\n<li>Mississippi<\/li>\n<li>New York<\/li>\n<li>Pennsylvania<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>When it comes to state tax policies, federal legislation exists to protect governmental civil service pensions. Because of this, pensions deriving from state or local governments cannot receive better taxation than Federal civil service pensions. State tax departments are allowed to institute policies that favor their own state pensions over those from another state. The [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[126],"tags":[484],"class_list":["post-869","post","type-post","status-publish","format-standard","hentry","category-states","tag-state-pensions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Government Pensions: State Tax Rules - eTax.com\u00ae Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.etax.com\/blog\/2016\/04\/03\/government-pensions-state-tax-rules\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Government Pensions: State Tax Rules - eTax.com\u00ae Blog\" \/>\n<meta property=\"og:description\" content=\"When it comes to state tax policies, federal legislation exists to protect governmental civil service pensions. Because of this, pensions deriving from state or local governments cannot receive better taxation than Federal civil service pensions. State tax departments are allowed to institute policies that favor their own state pensions over those from another state. 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