The Minnesota Screw

"The majority of veterans are happy to do what they did. Most made peanuts for salary as compared to civilian counterparts." 

There are more than two advantages our neighbor to the east has over us. To quote a very good friend of mine who moved there a couple years ago, "Living is Wisconsin is like getting a raise." That would be funny if it were not so sad for the rest of us who are still here trying to make this state work. As I have said in the past, Wisconsin does NOT tax ANY part of Social Security. That is huge. Nor do they tax ANY part of military retirement pay. That is not quite as huge, as that does not affect everyone like Social Security does (or will).

However - to mollify the Very Angry Bird, I was told by more than one person (who was in St. Paul at the end of session), not to worry. They could not get Social Security this time (dang, we tried!), but we fixed veteran's retirement! I read the part of the bill someone sent me right after the "witching hour". I felt stupid as I could not see the plain language where veteran's retirement pay was exempt from state income tax. So I have been digging.

Here is the language as it exists in the current tax forms:

If you (and/or your spouse if filing a joint return) have separated from service and your federal adjusted gross income (from line 37 of Form 1040, line 21 of Form 1040A, or line 4 of Form 1040EZ) is less than $37,500, you qualify for a credit if you:

  • were honorably discharged and receive a military pension or other retirement pay for your service in the military;

 • have a service-related disability rated by the U .S . Department of Veterans’ Affairs as being 100 percent total and permanent . If your federal adjusted gross income is: 

 • $30,000 or less, enter $750 on line 2 of Schedule M1C . (If you and your spouse both qualify for the credit and you are filing a joint return, enter $1,500 .)

 • between $30,000 and $37,500, use the  worksheet on this page to determine your credit amount .

 • more than $37,500, you do not qualify for  this credit . 

If you don't want to read the above, I don't blame you. Let me help. If there is an exclusion of military retirement in the new tax bill, it is hidden very well. In the current language (above), a veteran would almost have to live in poverty to collect it. The new language allows the income level to be slightly raised, and the credit increased to $1,000 (big whoop).

Here are the facts. The majority of veterans are happy to do what they did. They would do it again. Most made peanuts for salary as compared to their civilian counterparts. They don't want a credit on their taxes - they just want that small, yet livable retirement check to be exempt from state taxes. You know, like many other states do. And by the way - most vets I have met are not sloths. They would not be satisfied with living on $30,000/year if they could help it.

Bottom line - right now it looks like the Minnesota seniors as well as retired veterans got screwed once again. There is nobody looking out for us in St. Paul. Well, that is going to change - and quickly. The number of Social Security reciprocates keeps growing and the tolerance for inaction keeps shrinking. The Bird is on this. More to come.