Drawing on a NJ tax deferred annuity 403b do not pay NJ state income tax. Plan now to file as SC resident . Responsible for paying SC state tax on that NJ annuity?

[SteamTrain]

As far as I can see...Yes..SC would tax it.
BUT perhaps not all of it.  There is a 10k deduction for retirement income, or up-to 25k IF you are 65 or older.
And...SC doesn't tax SS income.

 Check all of the Retirees & Seniors FAQs at:
<a rel="nofollow" target="_blank" href="https://dor.sc.gov/tax/individual-income/faq">https://dor.sc.gov/tax/individual-income/faq</a>

[tompass]

Thanks.  I understand the SC tax with exclusions on pension income but this income is a distribution from a tax deferred annuity to which my contributions were taxed by NJ.  When I file in NJ, I am not double taxed on the distributions.  Question is will SC just treat the distribution as pension income or is there a way to show that you were previously taxed on contributions by NJ?

[SteamTrain]

I'm not clear on how that is handled by SC...you may be effectively double-hit, but I'm not sure.

[SweetieJean]

NJ is funky in that the converse is "true."  If you had worked in a state where those contributions were deductible, but then move to NJ when you retire.... You get a double benefit.

[tompass]

Wow. Going to see if I can get an accounting of my actual contributions that were taxed in NJ and report same to SC to avoid the double whammy.

[SweetieJean]

Did you move during 2017?

[tompass]

No.  Moving officially in next month or so but will fill as SC resident when I do 2018 taxes.

[tompass]

file not fil...

[SweetieJean · Accepted solution]

You will file a full year NJ resident return for 2017, and then part year resident returns in both NJ and SC for 2018.  Can you take a lump sum from the 403(b)? if so, see if you can do that while still in NJ and roll it to an IRA. then draw form the IRA as needed..

SC has a retirement income deduction. For taxpayers under the age of 65, the deduction is $3,000. For seniors 65 and older the deduction is $15,000. This can be applied across all types of retirement income, including income from a 401(k), an IRA, a government pension or a public pension.