To amend title 4 of the United States Code to limit State taxation of certain pension income.
PL 104-95 (H.R.394), enacted 01/10/1996

PUBLIC LAW 104-95-^AN. 10, 1996 
109 STAT. 979 
Public Law 104-95 
104th Congress 
An Act 
To amend title 4 of the United States Code to limit State taxation of certain 
Jan. 10, 1996 
pension income. 
[H.R. 394] 
Be it enacted by the Senate and House of Representatives 
of 
the United States of America in Congress assembled, 
SECTION 1. LIMITATION ON STATE INCOME TAXATION OF CERTAIN 
PENSION INCOME. 
(a) IN GENERAL.—Chapter 4 of title 4, United States Code, 
is amended by adding at the end the following: 
"§ 114. Limitation on State income taxation of certain pen-
sion income 
"(a) No State may impose an income tax on any retirement 
income of an individual who is not a resident or domiciliary of 
such State (as determined under the laws of such State). 
"(b) For purposes of this section— 
"(1) The term 'retirement income' means any income from— 
"(A) a qualified trust under section 401(a) of the 
Internal Revenue Code of 1986 that is exempt under section 
501(a) from taxation; 
"(B) a simplified employee pension as defined in section 
408(k) of such Code; 
"(C) an annuity plan described in section 403(a) of 
such Code; 
"(D) an annuity contract described in section 403(b) 
of such Code; 
"(E) an individual retirement plan described in section 
770 l(a)(37) of such Code; 
"(F) an eligible deferred compensation plan (as defined 
in section 457 of such Code); 
"(G) a governmental plan (as defined in section 414(d) 
of such Code); 
"(H) a trust described in section 501(c)(18) of such 
Code; or 
"(I) any plan, program, or arrangement described in 
section 3121(v)(2)(C) of such Code, if such income— 
"(i) is part of a series of substantially equal periodic 
payments (not less frequently than annually) made 
for— 
"(I) the life or life expectancy of the recipient 
(or the joint lives or joint life expectancies of the 
recipient and the designated beneficiary of the 
recipient), or 
"(II) a period of not less than 10 years, or 
109 STAT. 980 
PUBLIC LAW 104-95—JAN. 10, 1996 
"(ii) is a payment received after termination of 
employment and under a plan, program, or arrange-
ment (to which such employment relates) maintained 
solely for the purpose of providing retirement benefits 
for employees in excess of the limitations imposed by 
1 or more of sections 401(a)(17), 401(k), 401(m), 402(g), 
403(b), 408(k), or 415 of such Code or any other limita-
tion on contributions or benefits in such Code on plans 
to which any of such sections apply. 
Such term includes any retired or retainer pay of a member 
or former member of a uniform service computed under chapter 
71 of title 10, United States Code. 
"(2) The term 'income tax' has the meaning given such 
term by section 110(c). 
"(3) The term 'State' includes any political subdivision of 
a State, the District of Columbia, and the possessions of the 
United States. 
"(e) Nothing in this section shall be construed as having any 
effect on the application of section 514 of the Employee Retirement 
Income Security Act of 1974.". 
(b) CONFORMING AMENDMENT.—^The table of sections for chapter 
4 of title 4, United States Code, is amended by adding at the 
end the following: 
"114. Limitation on State income taxation of certain pension income". 
4 use 114 note. 
(c) EFFECTIVE DATE.—^The amendments made by this section 
shall apply to amounts received after December 31, 1995. 
Approved January 10, 1996. 
LEGISLATIVE HISTORY—H.R. 394: 
HOUSE REPORTS: No. 104-389 (Comm. on the Judiciary). 
CONGRESSIONAL RECORD, Vol. 141 (1995): 
Dec. 18, considered and passed House. 
Dec. 22, considered and passed Senate.