KCSD pension taxable? (Kansas City: school district, income, income tax)

[Hazel W]

Since I do not do my own tax returns, I seem to have fallen behind the times on facts. The last I knew, the Kansas City School District pension was not taxable in Missouri. I am told that it now is. Does anyone know for certain? Thank you.

[Samantha S]

There is a "Facts Book" on this website.

Home

Page 16 indicates that benefits are taxable in MO. Certainly they are subject to Federal taxes.

BTW: Don't give away your benefit! If you ever think you want a lump sum return of contributions instead of the monthly benefit offered, have the monthly benefit valued as a lump sum for comparison. It's likely to be at least twice as valuable as a return of your own contributions with interest.

Best of luck to you!

[Okey Dokie]

They may be exempt from some state tax. See attached from Missouri Department of Revenue page
http://dor.mo.gov/tax/personal/ptc/pension.pdf (broken link)

and

http://dor.mo.gov/tax/personal/whatsnew/#public

[westender]

Wow -- that's kind of outrageous that Missouri treats private pensions and public pensions differently for state income taxation. The exemption levels really should be equal regardless of the source of the pension.

[Okey Dokie]

Many states exempt public pensions from state taxes (Kansas is one, and Oklahoma will be 100% tax free in 2012 - I think that's the right year).

One reason is because many people who have public pensions did not pay Social Security and their pension is in lieu of Social Security. Since Social Security earnings are rarely taxed by the state, the legislatures believed it was not right to tax public pensions.

There may be other reasons, but this was the explanation I was always given.

[Hazel W]

Thank you all. Kansas City School District is an exception on the pension. We paid both Social Security and pension plan. I shall never regret that. Most of Missouri districts did not pay into Social Security.

I shall check out the links provided. Thanks again.