Okla. Admin. Code § 710:50-15-49

Current through Vol. 42, No. 7, December 16, 2024

Section 710:50-15-49 - Deduction for retirement income

(a)General provisions applicable to Oklahoma or federal government retirement income. Each individual taxpayer may deduct up to Ten Thousand Dollars ($10,000.00) of retirement benefits paid by the State of Oklahoma or by the federal government. This deduction cannot exceed the amount included in the taxpayer's federal adjusted gross income. The total exclusion from all government retirement benefit plans may not exceed Ten Thousand Dollars ($10,000.00)per individual.

(b)Qualifying Oklahoma or federal government retirement income defined. For purposes of this Section, "Oklahoma or federal government retirement income" means retirement income received from the following sources:

(1) The Civil Service of the United States;

(2) Any Component of the Armed Forces of the United States; [See special rule (g)]

(3) The Oklahoma Public Employees' Retirement System;

(4) The Oklahoma Teachers' Retirement System;

(5) Oklahoma Law Enforcement Retirement System;

(6) Oklahoma Firefighters' Pension and Retirement System;

(7) Oklahoma Police Pension and Retirement System;

(8) The Employee retirement systems created by counties pursuant to 19 O.S. §§951 et seq.

(9) The Uniform Retirement System for Justices and Judges;

(10) The Oklahoma Wildlife Conservation Department Retirement Fund;

(11) The Oklahoma Employment Security Commission Retirement Plan; or,

(12) The Employee retirement systems created by municipalities pursuant to 11 O.S. §§ 48-101 et seq.

(c)Disability income; state and federal government retirees. Disability retirement benefits received by an individual from sources listed in subsection (b) shall qualify for the retirement income deduction, without regard to the recipient's age.

(d)General provisions for other retirement income. Each individual taxpayer may deduct up to Ten Thousand Dollars ($10,000.00) of other retirement benefits received and included in federal adjusted gross income. This deduction cannot exceed the amount included in the taxpayer's federal adjusted gross income. The total exclusion from all retirement benefit plans may not exceed Ten Thousand Dollars ($10,000.00) per individual.

(e)"Qualifying other retirement income" defined. For purposes of this Section "other retirement income" must be received from the following and satisfy the requirements of the Internal Revenue Code (IRC):

(1) An employee pension benefit plan under IRC Section 401;

(2) An eligible deferred compensation plan under IRC Section 457;

(3) An individual retirement account, annuity, or trust or simplified employee pension under IRC Section 408;

(4) An employee annuity under IRC Section 86; or,

(5) Lump-sum distributions from a retirement plan under IRC Section 402(e).

(f)Disability income; private sector retirees. Disability retirement benefits received by an individual shall qualify for the retirement income deduction, without regard to the recipient's age.

(g)Special rule for certain retirement income from a component of the Armed Forces of the United States. Effective for tax year 2006, the deduction for retirement income from any component of the Armed Forces of the United States is the greater of Ten Thousand Dollars ($10,000.00) or fifty percent (50%) of the amount included in the taxpayer's federal adjusted gross income. Effective for tax year 2007 and subsequent tax years, the deduction for retirement income from any component of the Armed Forces of the United States is the greater of Ten Thousand Dollars ($10,000.00) or seventy-five percent (75%) of the amount included in the taxpayer's federal adjusted gross income. For tax year 2022 and subsequent tax years, retirement benefits received by an individual from any component of the Armed Forces of the United States shall be exempt from taxable income.

(h)Special rule for Federal civil service retirement income. Beginning with tax year 2011, retirement benefits received by federal civil service retirees, including survivor annuities paid in lieu of Social Security benefits, are allowed to be excluded from Oklahoma taxable income to the extent such benefits are included in the taxpayer's federal adjusted gross income, pursuant to the provisions of Section 86 of the Internal Revenue Code.

Okla. Admin. Code § 710:50-15-49

Added at 20 Ok Reg 20, eff 10-8-02 (emergency); Added at 20 Ok Reg 2165, eff 6-26-03; Amended at 22 Ok Reg 354, eff 1-1-05 (emergency); Amended at 22 Ok Reg 1532, eff 6-11-05; Amended at 23 Ok Reg 2824, eff 6-25-06; Amended at 24 Ok Reg 2359, eff 6-25-07

Amended by Oklahoma Register, Volume 40, Issue 22, August 1, 2023, eff. 8/11/2023