November 27, 1981
You are a former federal civil service employee who has been found to be disabled by the federal Office of Personnel Management (OPM). You are receiving a federal disability retirement annuity and request a ruling as to the Massachusetts income taxation of the annuity.
A federal civil service employee is required to contribute a portion of his salary to the federal Civil Service Retirement and Disability Fund. (5 U.S.C. 8334). Under the civil service system, an employee who has completed 5 years of service and has been found by OPM to be disabled is entitled to a disability retirement annuity. Until he reaches the age of 60, to continue to receive the annuity, an employee who is not permanently disabled must undergo yearly medical examinations under the direction of OPM and meet certain earning capacity limitations. (5 U.S.C. 8337).
General Laws Chapter 62, Section 2 defines Massachusetts gross income as federal gross income with some modifications. Section 2(a)(2)(E) deducts from federal gross income in determining Massachusetts gross income "...income from any contributory annuity, pension, endowment or retirement fund of the United States government...to which the employee has contributed."
Based on the foregoing it is ruled that the income from your federal contributory disability retirement annuity is not includible in Massachusetts gross income.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue