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In March of 2019, the Supreme Court decided in favor that WV can not tax other states public service retirement (as I understand what I read). How do I put in the expemt

prfs541
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itonewbie
Level 15

The case relies upon the intergovernmental tax immunity doctrine, which prohibits discriminatory tax treatments between state and federal employees and officials who perform similar duties based on their source of pay or compensation.  Despite the eye-catching headline, the application is more narrowly defined as it involves W. Va. Code Ann. §11–21–12(c)(6), which provides a subtraction from federal AGI, to the extent included in federal AGI for federal tax purposes "[r]etirement income received in the form of pensions and annuities under any West Virginia municipal police retirement system, West Virginia municipal firemen's retirement system or the West Virginia State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or the West Virginia Deputy Sheriff Retirement System, including any survivorship annuities derived from any of these programs."

Your question seems to imply that your client's retirement compensation was from "other states public service" and not the federal government and there is no mention that your client was a law enforcement official or fireman or someone who performed services in those capacities, which means this ruling may not be relevant to you.

In case your client was indeed a federal employee but whose duties were not as described under W. Va. Code Ann. §11–21–12(c)(6), there is already equal treatment under W. Va. Code Ann. §11–21–12(c)(5).

Should you decide that the ruling would apply to your client after examining all the facts, you may subtract the retirement compensation from the federal AGI as if it were from WV but may like to make a disclosure since the case was remanded to WV, which has yet to issue any new guidance, AFAIK.  In the past, states have addressed this in different ways, which include scaling back the exemption available to state employees, so it is not clear which route WV may take at this point.

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itonewbie
Level 15

The case relies upon the intergovernmental tax immunity doctrine, which prohibits discriminatory tax treatments between state and federal employees and officials who perform similar duties based on their source of pay or compensation.  Despite the eye-catching headline, the application is more narrowly defined as it involves W. Va. Code Ann. §11–21–12(c)(6), which provides a subtraction from federal AGI, to the extent included in federal AGI for federal tax purposes "[r]etirement income received in the form of pensions and annuities under any West Virginia municipal police retirement system, West Virginia municipal firemen's retirement system or the West Virginia State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or the West Virginia Deputy Sheriff Retirement System, including any survivorship annuities derived from any of these programs."

Your question seems to imply that your client's retirement compensation was from "other states public service" and not the federal government and there is no mention that your client was a law enforcement official or fireman or someone who performed services in those capacities, which means this ruling may not be relevant to you.

In case your client was indeed a federal employee but whose duties were not as described under W. Va. Code Ann. §11–21–12(c)(6), there is already equal treatment under W. Va. Code Ann. §11–21–12(c)(5).

Should you decide that the ruling would apply to your client after examining all the facts, you may subtract the retirement compensation from the federal AGI as if it were from WV but may like to make a disclosure since the case was remanded to WV, which has yet to issue any new guidance, AFAIK.  In the past, states have addressed this in different ways, which include scaling back the exemption available to state employees, so it is not clear which route WV may take at this point.

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prfs541
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Thank you...........  this was the information I was looking for.  Thank you for the clear and concise explanation and the references.
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itonewbie
Level 15
NP.
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itonewbie
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This forum is open only to tax professionals.  You may like to raise this question on the TurboTax xchange or consult your paid accountant.

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prfs541
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I am a tax professional.................  Phoenix Rising Financial Services.............. that is how I am able to post on this forum
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itonewbie
Level 15
You'd be surprised how DIYers get in.
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