State Offering More Than Stimulus Checks: 12 States That Will Not Tax You Retirement Plans

Stimulus Check
Stimulus Check

With finances stretched thin due to the pandemic, one of the biggest worries about people is keeping some money aside for their retirement plans. The end of the federal stimulus checks in 2021 and the high inflation in the first quarter of 2022 have led to most families, even upper-middle-class ones, dipping into their savings to sustain the present.

The prices of gas have almost doubled in the past 2 years and groceries and other essential items continue to be high. The inflation rate has reached its highest in over 4 decades and the federal administration has no plans to come up with another round of stimulus checks.

While states have stepped in with measures to give tax rebates, gas cards, transit cards, and direct stimulus checks, even local bodies have stepped in targeting specific marginalized groups, those who have missed out on stimulus checks in previous rounds.

Waving Tax On Retirees: State Come Up With Plans Other Than Stimulus Checks

Another issue is one of the taxes in the retirement budget of most Americans. 12 states have measures that do not tax distribution from pensions or defined contribution plans such as 401(k).

Nine of the state does not have state income taxes, including Nevada, Florida, Alaska, Tennessee, South Dakota, New Hampshire, Wyoming, Washington, Tennessee, and Texas. The remaining three, Pennsylvania, Mississippi, and Illinois do not tax distributions from 401(k) plans, pensions, or IRAs. Hawaii and Alabama do not tax pensions but tax distributions from IRAs and 401(k) plans.

But some states with no income tax or low taxes have higher sales and property taxes. For instance, Illinois does not tax retirement income but has one of the highest property and sales taxes in the US.

Massachusetts To Distribute $500m Stimulus Checks Under The Pandemic Essential Employee Premium Pay Program

The Massachusetts governor signed the Essential Employee Premium Pay program which allocates close to $500M for premium payments for workers in the state.

This law provides for the government to design the program and come up with eligibility parameters to ensure that critical support reaches deserving workers quickly across the commonwealth.

Around 240,000 workers have benefitted from the $500 stimulus check in the first round of this program. The second round is slated to reach around 300,000 additional individuals and families in June.

To be eligible to receive this second round of the premium paycheck, individuals and families should have filed their income tax returns for 2021. They must have been a resident of Massachusetts on or before June 15, 2021, or at least a part-year resident of Massachusetts between January 1, 2021, and June 15, 2021.

Eligible individuals and families must have a total household income that is 300% below the federal poverty level in 2021.

Eligible taxpayers must also not have to receive the stimulus check in the first round of the program or receive any other compensation for unemployment in 2021. They must also not be an employee of the executive branch of the Commonwealth or received a one-off payment related to the pandemic from the Commonwealth as their employer.

Based on the returns filed under the 2021 income tax, individuals will get the $500 stimulus check if their income from employers was at least $13,500 and their total income placed them 300% below the federal poverty level.

Maine Residents Will Get A $850 Stimulus Check Automatically This Month

Around 500,000 stimulus checks worth $850 will go out automatically through mail to residents of Maine. The state started its tax rebate program by sending $850 to individuals and $1,700 to the average family in the state.

Around 5,000 individuals and families received their stimulus checks this week and an estimated 200,000 will receive their relief payment by this week.

To qualify for this Maine rebate check, there are a few requirements for eligible residents. The income of an individual tax filer must not exceed $100,000 while married couples filing jointly and heads of households are eligible if they earn $200,000 and $150,000.

The income will be calculated on the income tax returns of 2021, and it must be filed before October 31, 2022. Moreover, the claimant must not be claimed as a dependent on the tax return of another income tax filer in the state.

In all-around 858,000 residents of Maine are eligible for the state stimulus check. people who have filed their returns after May 31will experience a delay in receiving their stimulus check from the Maine administration.

Chicago Residents Can Get Either A Gas Card Or A Transit Card

Eligible residents in Chicago can now apply for a public transit card or a prepaid gas card. Residents of the city may now be able to apply for these cards to help cover their transportation expenses.

Even as gas and transit prices have hit an all-time high all around the country, residents of Chicago are eligible t apply for prepaid gas and transit cards worth $150 and $50 respectively.

The city administration will choose lottery winners for these stimulus checks through monthly draws.

The city wants to help its residents as high inflation ensures that all-round costs remain at their highest in 4 decades, with transportation costs hitting the hardest as gasoline prices have almost doubled in 2 years.

North Carolina Could Send A Gas Relief Stimulus Check To Residents

A gas stimulus check for North Carolina residents could be in the process as several lawmakers proposed a $200 stimulus check for residents. With gas prices almost doubling in the past two years, the state senators have proposed giving every adult licensed driver a one-off payment of $200.

To be eligible, the person should have a licensed driving license and must be at least 18 years old on March 31st. The Gas Tax Rebate Act, 2022, would be funded through the $4.241 billion revenue surplus enjoyed by the state in 2021. Around $1.3 billion would be needed to fund the drive.

The amount to be given to every resident is around the tax that an average person would pay in gas tax between July and December. This approach will keep the Highway Fund and the Highway Trust Fund untouched while continuing to collect revenue from non-residents who pass through the state.

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