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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Do Senior Citizens at age 65 pay less State Taxes

Resolved Question:

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Submitted: 9 years ago.
Category: Tax
Expert:  Ed Johnson replied 9 years ago.

Dear Bernice,

Some state have programs to exempt a larger portion of ss income or limit property taxes for seniors.

Please let me know your state, and I will send you the state tax treatments

Ok so now I see NC just showed up in your signature box.

Here is the NC treatment:

Retirement Income Taxes: Social Security is exempt. At least $4,000 in exclusions for federal, state and local pensions (depending on dates and length of service); up to $2,000 exemption for qualified private pensions, including IRAs. Out-of-state government pensions also qualify for the $4,000 exemption. State retirees with at least 5 years of creditable service as of August 12, 1989, will be permanently exempt from state income tax on their retired/retainer pay. Be sure to investigate the Bailey decision. Taxable income also includes income derived from gaming in North Carolina. For more details on retirement income deductions, click here.
Retired Military Pay: If an individual had five years of creditable service as of August 12, 1989, all military retired pay is exempt from taxes. Otherwise, a deduction of up to $4,000 is allowed for military pay or survivor's benefits.
Military Disability Retired Pay:
Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Property Taxes
All property, real and personal, is subject to taxation and is assessed based on 100% of appraised value. Taxes are collected by cities and counties. Under the homestead exemption, the greater of $20,000, or 50% of the appraised value of real property owned by a North Carolina resident and occupied by the owner as his or her permanent residence is excluded from the taxpayer's assessment, if the following requirements are met: (1) The owner is 65 years of age or older or is totally and permanently disabled. (2) The disposable income of the owner did not exceed $20,500 for calendar year 2006 if applying in 2007. The income eligibility limit is adjusted each year by the Social Security cost-of-living adjustment. The disposable income limit amount includes all moneys received plus the disposable income of the applicant's spouse if they reside together. Call(NNN) NNN-NNNNfor details or click here.

Inheritance and Estate Taxes
There is no inheritance tax and the estate tax is related to federal estate tax collection.

Customer: replied 9 years ago.
North Carolina is my State for paying State Taxes.
I am 68 years old.
Expert:  Ed Johnson replied 9 years ago.

Dear Bernice,

Please let me know if what I sent is good?

Ed Johnson and other Tax Specialists are ready to help you