Please Sir! I Want to Keep More of What I Have: Focus on Senior Citizen Taxation (State and Federal)

As the population ages and more taxpayers live on fixed incomes, both federal and state governments face challenges in determining the appropriate level of taxation for retirees. For federal income tax purposes, retirement income is generally fully includable in a taxpayer's income, except for the portion representing a return of basis (after-tax contributions and Roth contributions/earnings). Social Security benefits are taxable under federal law to a certain extent for most. However, many states modify the taxability of retirement benefits. States and localities frequently enact property tax relief measures too. These may include exemptions, credits, and abatements for senior taxpayers. See this state law survey for more information.

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