Special retirement supplement and taxes


Q. I live in a state that does not tax Social Security (including supplements) and allows a $6,000 deduction of pension income (FERS). Is the FERS supplement portion of my pension exempt from state income tax as well?

A. Because the special retirement supplement is paid out of the Civil Service Retirement and Disability fund — not the Social Security Trust Fund — it would be treated as regular income for tax purposes.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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