Introduction

Income from a contributory public employee retirement plan of another state received by a Massachusetts resident may be deducted from Massachusetts adjusted gross income if that state does not tax income received by its residents from a Massachusetts contributory public employee retirement plan. G.L. c. 62, § 3(B)(a)(4). Thus, whether public employee retirement income paid by another state is subject to the Massachusetts income tax depends on the other state's income tax treatment of Massachusetts public employee retirement income. Recently, a number of states changed their income tax treatment of public employee retirement income in response to the United States Supreme Court's decision in Davis v. Michigan Department of the Treasury, 109 S. Ct. 1500 (1989). These changes have affected the Massachusetts income tax treatment of public employee retirement income paid by certain states.

Contributory public employee retirement income from thirteen states is deductible from Massachusetts adjusted gross income under Massachusetts General Laws Chapter 62, Section 3(B)(a)(4). The purpose of this Technical Information Release (TIR) is to list those thirteen states.

Application of the Massachusetts Deduction

Massachusetts General Laws Chapter 62, Section 3(B)(a)(4), provides a deduction from Massachusetts adjusted gross income of any income from a contributory annuity, pension, endowment or retirement fund of any other state or any political subdivision thereof, provided that income from any such similar fund established under the laws of the commonwealth is not subject to taxation in such other state or political subdivision.

Income from contributory public employee pensions of the following states and their political subdivisions is deductible under Massachusetts General Laws Chapter 62, Section 3(B)(a)(4):

Alaska
Connecticut
Florida
Hawaii
Illinois
Nevada
New Hampshire
Pennsylvania
South Dakota
Tennessee
Texas
Washington
Wyoming

This TIR is up to date through the end of each state's 1989 legislative session and may be relied upon for 1989 taxable years. The TIR does not reflect changes in other states' tax laws that may have occurred later. Information concerning any later changes may be available by contacting the taxing authority of the state in question.

/s/Stephen W. Kidder
Stephen W. Kidder
Commissioner of Revenue

February 13, 1990

TIR 89-10