NARFE ACHIEVES A GREAT LEGISLATIVE VICTORY!
NARFE Bill Passes Oklahoma Legislature
By James Crowder
On Friday, June 23, 2006, the Oklahoma Legislature passed a bill to make our Civil Service Retirement income completely tax exempt from Oklahoma income tax. The Senate passed the bill at 6:30 p.m. and the House did so at 10:00 p.m. The bill number that gave us this new deduction is HB 1174. This was the last day of the special session that had started on Wednesday, June 21, 2006. The bill phases in our complete deduction over a five year period starting the first day of January, 2007. This is a great victory for NARFE, something that we have worked hard to do for more than ten years.
The entire bill consists of 134 pages with 32 sections; all pertaining to various tax measures. I will quote our portion of the bill to give you a complete picture of how the new law will work. The bill on pages 93 and 94 in paragraph 20 reads as follows:
20. For taxable years beginning after December 31, 2006, retirement benefits received by federal civil service retirees, including survivor annuities, paid in lieu of Social Security benefits shall be exempt from taxable income to the extent such benefits are included in the federal adjusted gross income pursuant to the provisions of Section 86 of the Internal Revenue Code, 26 U.S.C., Section 86, according to the following schedule:
a. in the taxable year beginning January 1, 2007, twenty percent (20%) of such benefits shall be exempt,
b. in the taxable year beginning January 1, 2008, forty percent (40%) of such benefits shall be exempt,
c. in the taxable year beginning January 1, 2009, sixty percent (60%) of such benefits shall be exempt,
d. in the taxable year beginning January 1, 2010, eighty percent (80%) of such benefits shall be exempt, and
e. in the taxable year beginning January 1, 2011, and subsequent taxable years, one hundred percent (100%) of such benefits shall be exempt.
Elsewhere in the same bill, the portion containing our hard-won $10,000 yearly deduction remains intact.
The bill was sent to the Governor shortly after its House passage, and will become law when the Governor signs it. I will give you additional information as it becomes available.
This bill was made possible by the hard work that Senator Leftwich, Representative Calvey and Representative Banz put into it during the regular session, and continued in the special session, especially during the last day of the session. We owe them a great vote of thanks. I thanked them personally at the capitol right after each of the two houses had passed our bill.
A special thanks goes out to all of those NARFE members who have worked tirelessly over the years to see that this fair deduction is granted to all civil service retirees!
FEDERAL AND STATE INCOME
TAX REVIEW
Now is the time to review and make changes in federal and state
income tax withholding for the tax year, 2003. OPM has simplified
the process for both state and federal withholdings. OPM can be
contacted directly to have state income tax withheld for
Oklahoma. While you may now use the new toll-free retirement
information line for almost any transaction, we strongly suggest
that you use the tax line for all tax transactions.
1-800-409-6528.
Call 1-202-224-3121 or toll free 1-800-985-8762
OPM issued personal identification numbers (PIN) to annuitants in
October 1997. If yours is lost, misplaced, unknown or never
received, you can request a PIN by writing to OPM, RETIREMENT
SERVICES DIVISION, ROOM 1312, ATTN: PIN, WASHINGTON, DC 20415.
When you receive your PIN, call 1-888-767-6738 (during
non-business hours) to select your own customized PIN.
You can use the 1-888-767-6738 (TOLL FREE) NUMBER TO NOTIFY OPM
OF THE DEATH OF AN ANNUITANT. (THIS IS THE MOST EFFICIENT AND
QUICK WAY)
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