I am proud of the work we did during the 2023 Legislative Session to pass a two-year state budget that delivers historic tax cuts, including an expansion of existing exemptions on certain pension and annuity earnings to benefit seniors.
Specifically, the budget eliminates the retirement income tax cliff by adding a phase-out for allowable pension and annuity and IRA distribution deductions against the personal income tax.
Beginning with the 2024 tax year, eligibility is extended to taxpayers who make at least $75,000 but less than $100,000 for single filers, married people filing separately, and heads of household and at least $100,000 but less than $150,000 for joint filers. However, it gradually reduces the deductions for these taxpayers until they fully phase out at $100,000 or $150,000 as applicable. The table below shows the phase-out schedule.
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