The “Pension Tax” as it was formerly named (it was actually a retirement income tax) was first implemented in 2011 under the Snyder administration. It sought to tax retirement income – pensions, both public and private – in order to fund corporate/business growth. It earned the state over $300M dollars each year, roughly.
The repeal of this tax will take effect for the next tax season, in 2024. The repeal effectively resets the law back to what it was in 2011 with some minor changes.
The repeal affects anyone and everyone that was taxed under Snyder’s changes in 2011. This means anyone with a public pension, 401k, 403b, IRA, etc. It affects both private and public retirement incomes. It does not impact 457 plans, social security, or military pay.
Q: What is the retirement tax?
A: The retirement tax was first implemented in 2011. It taxed retirement income — pensions, both public and private — in order to fund tax breaks for corporations.
Q: When will the repeal of the retirement tax take effect?
A: The repeal will take effect for the 2024 tax season.
Q:Who will benefit from the repeal of the retirement tax?
A: The repeal benefits anyone who was taxed when the retirement tax was passed in 2011, including those with a public pension, 401(k), 403(b) or IRA. It affects both private and public retirement incomes. It does not impact 457 plans, Social Security or military pay since they were not impacted by the 2011 law.
Q: Will I have to pay higher taxes?
A: No. You can elect to file under the new law or the old law — whichever saves you the most money. Consult your tax professional to learn the best way for you to file.
Q: Will part-time earnings be impacted?
A: No, part-time earnings are not impacted by the repeal.