The state of Indiana allows individuals receiving Social Security or railroad retirement income to be exempted from state income taxes. Yet individuals who receive federal civil service pensions are allowed only a $2,000 exemption.
In other words, 774,651 retirees pay no Indiana income taxes on their Social Security retirement income, 15,900 retirees pay no Indiana income taxes on their railroad retirement income, but 26,221 retirees in the federal civil service retirement program have their money taxed.
To add insult to injury, under federal tax codes, the income of a family under Social Security is exempted $32,000, but the income of a retiree under civil service retirement systems is taxed fully.
In the last five years, lawmakers have authored legislation to remedy this disparity but lacked the support of their colleagues to correct this injustice.
The National Association of Retired Federal and Active Federal Employees will be soliciting our legislators to correct this disparity, but they need help from our neighbors.
We can legislate tax breaks for business in the tens of millions and provide exempted inheritance tax in the tens of millions. Surely our elected officials can resolve this dilemma for our federal civil service seniors.
CARL A. BERNACKY Indiana 1st Congressional District liaison National Association of Retired Federal Employees