A New Federal Law
Prohibits States from Taxing Non-Resident Pensions

In the past, some states, like California, demanded payment of income taxes on retirement income even though the retired person moved to a different state. It was called a "source tax," meaning that states traced your retirement income back to the source - the state, where it was originally earned. Retirement earnings followed a retired person to ANY state to which they may choose to move. A new federal law prohibits states from collecting income taxes from non-residents. So you can move to Nevada and no longer pay state income taxes since Nevada has none.

To show you how ridiculous these "source tax" state laws were, I asked the Franchise Tax Board of California if I had to pay income taxes on the proceeds of my book if I moved to Nevada. They contended that I did since they said I wrote it while in the state. When I told them that I would not have been able to write it without the schooling that I obtained in South Dakota and according to their thinking, South Dakota could claim that the proceeds of my authorship resulted from my training. Then they could ask for their cut. You can begin to see the extent taxing agencies will go.

Most retires who will benefit from this new federal law might not be aware of the tremendous effort and dedication some individuals made to make this happen. There may be others that I am unaware of but we must thank William (Bill) Hoffman, President of RESIST of America, 2440 Ash Canyon Road, Carson City, NV 89703. Bill and his wife, Joanne, worked long hours and several years getting help from volunteers and support from the RESIST Board of Directors. Kudos to all individuals who helped make this new law a reality.

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Last update 5/13/96