Tax questions

March 28, 2000

Members of the Maryland Association of Certified Public Accountants are answering readers tax questions through April 15.

My son gets survivor benefits from the Air Force. Does that have to be claimed as income and taxes paid on it? Do you have to pay state income tax on that money?

The Survivor Benefit Plan of the Armed Forces is a type of retirement plan that provides annuity benefits to the participant and also provides benefits to the participant's survivors if he or she elected to do so. The benefits are fully taxable for federal and Maryland income tax purposes. Because the Air Force participant had elected to accept a lower annuity during his or her lifetime to fund the annuity to his or her survivors, the reduction in his or her annuity during the participant's lifetime is not considered taxable income.

Sheldon J. Berman, CPA, Rosen, Sapperstein & Friedlander Chartered

The above advice is for general purposes and is not intended as legal, accounting or tax advice. Specific situations may vary.

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