You may be able to subtract some or all of your taxable federal pension included in your federal income. This includes benefits paid to the retiree or the beneficiary. The subtraction amount is based on the number of months of federal service before and after October 1, 1991:
- If all your months of federal service were before October 1, 1991, subtract 100 percent of the taxable amount of federal pension income you reported on your federal return.
- If you have no months of service before October 1, 1991, you cannot subtract any federal pension.
- If your service was both before and after October 1, 1991, subtract a percentage of the taxable federal pension income you reported on your federal return.
For more information, see Form 40 Instructions.