I have a client, who moved from AK to ID a few years ago. Had an AK Retirement. Drew out a substantial amt of $ to buy home (not a first time home buyer) in ID. She had plenty of Fed W/H, but nothing for ID. I can't find a way around that ID income tax & she's SO upset. $ wasn't earned or banked in ID, just drawn out & spent there. Am I missing anything? She owes like $9000! to ID if she's fully taxed by the state. I can't get ahold of a person who can talk to me at the state tax office.
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Retirement distributions are taxed where the taxpayer resides.
Idaho taxes on retirement income
Idaho taxes most types of retirement income and has a flat tax rate. However, there are no estate or inheritance taxes in Idaho.
Income Tax on Taxable Income: 5.8% flat tax rate- Social Security: Not taxable
- Pensions: Partially taxable (Some military and government pensions might qualify for an exemption)
- 401(k) and IRA Distributions: Taxable
Congress legislated a Federal supersedure, which applies to amounts received after December 31, 1995.
4 U.S.C. section 114
https://uscode.house.gov/view.xhtml?req=(title:4%20section:114%20edition
relim)%20OR%20(granuleid:USC-prelim-title4-section114)&f=treesort&edition=prelim&num=0&jumpTo =true.
Last edited by Lion; Today, 12:30 AM. -
Sorry, that link doesn't copy. The emoji is actually edition followed by a colon followed by prelim with no spaces.Comment
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The link works properly. Just copy (stopping at ...ition) / paste into browser.
While ID is far away from me, I assume it taxes a RESIDENT on all income with whatever exclusions ID might have. The absence of any ID withholding by the AK folks is not surprising. I have clients who worked in / retired from State of NC but now live in different states. Their forms 1099-R show proper federal withholding, but NO withholding for their resident state. They cover the shortfall with estimated tax payments to their resident state.Comment
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