Several states have rules about the taxability of payments received under a defined benefit plan that are in contrast to the federal rules. First, discuss why some states choose not to tax those payments. Next, choose a state that has an income tax and discuss that state’s laws for taxing this type of income.

1. Several states have rules about the taxability of payments received under a defined benefit plan that are in contrast to the federal rules. First, discuss why some states choose not to tax those payments. Next, choose a state that has an income tax and discuss that state’s laws for taxing this type of income.