I receive a pension from one state but live in another state. Do I have to pay state taxes in both states

[MayaD]

No. Your pension income is only taxable on your resident state return. California does not tax the CalSTRS benefits of nonresidents. 

For Nonresident:

California does not tax the IRA distributions, qualified pension, profit sharing, and stock bonus plans of a nonresident. California taxes compensation received by a nonresident for performance of services in California. FTB Pub. 1100

California does not impose tax on retirement income received by a nonresident after December 31, 1995. FTB Publication1005

If you already filed CA nonresident return and claimed your pension income, you need to amend your CA return. 

[mdouthit]

I spoke to someone at Calif. State Franchise Tax Board who said that since CALSTRS (State teachers retirement system) insists on completing box 15 on the 1099R with the state payer's no, the income is reported and I have to pay taxes on the income.  For over three years I have lived in Arkansas and pay taxes on my retirement income on a quarterly basis. there also.  After filing my taxes and paying to both states, Arkansas reimburses me a good portion of what I paid them, but essentially, I am being taxed by two states on the same income until I get my tax return.  I also have to pay more to get my taxes done as well as higher taxes in CA.  The guy at the CA. tax board told me that the only way to change it is to convince CALSTRS to amend the 1099R which I have unsuccessfully tried to do for two years now.

[DoninGA]

@mdouthit Whomever you spoke to at the California FTB either did not know the tax code, misunderstood your question or flat out lied to you.

See - https://finance.zacks.com/california-pension-income-taxable-outside-california-8191.html

On Jan. 10, 1996, P.L. 104-95 took effect. This federal law prohibits any state from taxing pension income of non-residents, even if the pension was earned within the state. Before the passage of this law, California, New York and several other states maintained a source tax on pension earned within the state. For example, a California teacher who retired to Nevada would have to continue paying the source tax on her California pension. Thanks to this law, people who earn a pension in California then move out of the state no longer have to pay taxes on these funds to California.

Are California state income taxes being withheld on your Form 1099-R?  They would be entered in box 14.  If they are not being withheld then you do not have to file a California state income tax return.

[FI60]

I have a similar issue. My ex-husband and I were both teachers in California. l retired in 2018 and moved to Georgia, and everything was ducky until my ex retired in 2022. I received 3 1099-Rs from California. My monthly pension and my portion of his did not have state tax deducted on the 1099-R. The lump sum distribution from his retirement generated a separate 1099-R, and that one shows a whopping $35.38 in box 14. I called CalSTRS, and they told me that some small check that went out in November had state tax deducted per my ex's request, and there's nothing I can do about that. I have absolutely no interest in getting that $35 back. Am I still required to file taxes in California as the TurboTax program is insisting I do? It will cost me more than the $35 to go through that extra headache, and I am hoping I do not need

[RobertB4444]

No, you are not required to file to get your $35 back.  If the TurboTax program keeps insisting on it delete the $35 from box 14 and you should be ok.

@FI60 

[FI60]

Hallelujah!!!! Thank you so much!

[maryella]

Anyone know if Massachusetts and New Jersey have a reciprocal agreement regarding the taxation of teachers pensions? I receive a teachers pension from NJ and reside in MA. Cant find the answer online. Thank you!

[DMarkM1]

Since you are nonresident NJ your pension is not taxable in NJ.  Here is the NJ reference.  

@maryella 

[maryella]

Thank you but I need to know if my NJ teachers pension is taxable in Massachusetts where I live

[DMarkM1]

Yes, the NJ pension income is taxable in MA.  MA allows an exclusion of pension income if the other state would exclude similar MA pension income.  In this case NJ would be taxing the MA pension income therefore MA will be taxing the NJ pension income.  

[SoCal_Col]

Can I simply request that my CA County Pension Administrator discontinue taking the state tax out of my pension payments, and expect they will comply with my request?

[KarenL]

Yes, you can always request it.  @SoCal_Col