19 Jan How is my pension taxed in N.J. vs. Florida?

Q. I retired from the Port Authority of New York and New Jersey last year. My pension is via the New York State and Local Retirement Fund (NYSLRS). I currently live in New Jersey but I’m thinking of moving to Florida. What are the tax rates for my pension in Florida compared to New Jersey?
— Considering

A. Congratulations on your retirement.

You’re going to need to run some numbers.

Florida has no personal income tax, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

However, before you leave for Florida, you must know about the New Jersey Pension and Other Income Exclusion, he said.

New Jersey allows taxpayers aged 62 or older to exclude a certain amount of pension income from taxation if their income was at or below certain amounts.

Eligible pension income was excluded if their gross income was $100,000 or below.

“Since New Jersey does not tax Social Security income, the $100,000 in gross income does not include Social Security,” he said. “The maximum pension exclusion was $100,000 for married couples, $75,000 for singles and $50,000 for married couples filing separately.”

And if your total income is higher, depending on your filing status and capping at $150,000, you can exclude a percentage of your retirement income, Keily said.

But if your income was at $100,000 or below and you didn’t have sufficient pension income to use up the available exclusion, you could use the “Other Retirement Income Exclusion” to exclude other income such as wages, interest, dividends, self-employment income and capital gains, Keily said.

The “Other Retirement Exclusion is available only if your salaries, wages, sole proprietorships, partnerships and S-Corporations were $3,000 or less. If your earned income exceeds $3,000 you are not entitled to the “Other Retirement Income Exclusion,” he said.

So he recommends you run the numbers before you move to Florida.

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This story was originally published in January 2024.

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