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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.
If you would like to advise us of other laws, legislative or judicial activities important to senior citizens please click send us an e-mail.
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Last update 5/13/96
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