Several years residency in Florida, wants to withdraw funds from a savings & loan bank in Maine. No state income tax in FL, but there is in ME.
Will Maine be entitled to state income tax on the distribution? Everything tells me no, but is my only solution to set contingent funds aside for the ME tax?
Withdrawals from a savings account are never taxable, the interest earned while the money is in the account is taxable. Interest is generally taxable in the state of residence, not the state where the bank is located.
Ira Smilovitz, EA
Ira, OP's thread title says account is an IRA.
In my experience, he owes Maine nothing. Any state tax is owed to the state of his residence, not where the account is located,
As you know, that's one reason why so many folks retire to FL (and the few others), they don't tax IRA withdrawals.
You are correct. I missed the IRS reference. I didn't read the message title, but only responded to the text in the body of the message.
Ira Smilovitz, EA
ira smilovitz wrote in news: snipped-for-privacy@googlegroups.com:
Most people don't read the subject line. That's why it's so important to put the entire message in the body, and not rely on people reading the subject line.
Haven't people been retiring to FL since many years before IRAs were created (1974)?
Maybe it's the other way around: FL doesn't tax IRA withdrawals because their retirees are a huge voting block.
Yes, I had my thought in the 'Subject line.' Thanks for the confirming my suspicions on non-taxable.
So the real issue here is: did OP change his residency to Florida, in the eyes of the state of Maine? Or will the state of Maine try to still claim OP ad a Maine resident due to substantial remaining connections to Maine?
You have a point, but then, why would you open something you hadn't read the subject line to in the first place, IMHO?
I usually repeat myself in the body, unless the body says SSIA. But that qualifies as a repeat of sorts. ;)
Most people who read newsgroups (especially moderated groups) just go from one message to the next without looking at subject lines or discriminating based on the subject lines.
Since Maine has a state income tax, I expect that question was resolved some time ago when he moved to Florida.
Having an account in a bank is not a substantial connection. I have online accounts in banks in states where I haven't set foot in a decade, if ever.
I think that I read that the Special Survivor Indemnity Allowance (SSIA) was made permanent, earlier this year.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.