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NARFE Achieves a Great Legislative Victory!

 

  On Friday, June 23, 2006, the Oklahoma Legislature passed a bill to make our Civil Service Retirement income completely tax exempt from Oklahoma income tax. The bill number that gave us this new deduction is HB 1174. The bill phases in our complete deduction over a five year period starting the first day of January, 2007. This is a great victory for NARFE, something that we have worked hard to do for more than ten years.

 

          The entire bill consists of 134 pages with 32 sections; all pertaining to various tax measures.  I will quote our portion of the bill to give you a complete picture of how the new law will work. The bill on pages 93 and 94 in paragraph 20 reads as follows:

 

     For taxable years beginning after December 31, 2006, retirement benefits received by federal civil service retirees, including survivor annuities, paid in lieu of Social Security benefits shall be exempt from taxable income to the extent such benefits are included in the federal adjusted gross income pursuant to the provisions of Section 86 of the Internal Revenue Code, 26 U.S.C., Section 86, according to the following schedule:

a.                  in the taxable year beginning January 1, 2007, twenty percent (20%) of such benefits shall be exempt,

b.               in the taxable year beginning January 1, 2008, forty percent (40%) of such benefits shall be exempt,

c.               in the taxable year beginning January 1, 2009, sixty percent (60%) of such benefits shall be exempt,

d.              in the taxable year beginning January 1, 2010, eighty percent (80%) of such benefits shall be exempt, and

e.              in the taxable year beginning January 1, 2011, and subsequent taxable years, one hundred percent (100%) of such benefits shall be exempt.

 

Elsewhere in the same bill, the portion containing our hard-won $10,000 yearly deduction remains intact. 

 

This bill was made possible by the hard work that Senator Leftwich, Representative Calvey and Representative Banz put into it during the regular session, and continued in the special session, especially during the last day of the session. We owe them a great vote of thanks. I thanked them personally at the capitol right after each of the two houses had passed our bill.

 

A special thanks goes out to all of those NARFE members who have worked tirelessly over the years to see that this fair deduction is granted to all civil service retirees!