Do we qualify for the pension exclusion?


Q. My wife and I are both October babies and joint filers. This October, I’m turning 62 and she is turning 61. Do we qualify for the full income exclusion for state taxes in 2018, or is it only me?
— Taxpayer

A. We’ve got good news for you.

You need only be 62 on the last day of the tax year in order to meet the age requirement for claiming the pension exclusion, said Cynthia Fusillo, a certified public accountant with Lassus Wherley, a subsidiary of Peapack-Gladstone Bank, in New Providence.

If only one spouse reaches 62 by year end, New Jersey still allows you to claim the maximum exclusion – $80,000 for 2019 – but only against the pension, annuity or IRA income of the age-qualified spouse, she said.

You didn’t say how much your income is, but that’s just as important.

“There is also an income limit of $100,000 for claiming the exclusion and it is a cliff,” Fusillo said. “So even one dollar over $100,000 means no exclusion.”

Email your questions to moc.p1591047440leHye1591047440noMJN1591047440@ksA1591047440.

This story was originally published in March 2019. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.