[Code of Federal Regulations]

[Title 32, Volume 1]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 32CFR78.7]



[Page 457]

 

                       TITLE 32--NATIONAL DEFENSE

 

              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE

 

PART 78_VOLUNTARY STATE TAX WITHHOLDING FROM RETIRED PAY--Table of 

Contents

 

Sec.  78.7  Standard agreement.



    Standard Agreement For Voluntary State Tax Withholding From The 

Retired Pay Of Uniformed Service Members



                           Article I--Purpose



    This agreement, hereafter referred to as the ``Standard Agreement,'' 

establishes administrative procedures and assigns responsibilities for 

voluntary State tax withholding from the retired pay of Uniformed 

Service members consistent with section 654 of the Department of Defense 

Authorization Act for Fiscal Year 1985 (Pub. L. 98-525), codified as 10 

U.S.C. 1045.



                           Article II--Parties



    The parties to this agreement are the Department of Defense on 

behalf of the Uniformed Services and the State that has entered into 

this agreement pursuant to 10 U.S.C. 1045.



                         Article III--Procedures



    The parties to the Standard Agreement are bound by the provisions in 

title 32, Code of Federal Regulations, part 78. The Secretary of Defense 

may amend, modify, supplement, or change the procedures for voluntary 

State tax withholding from retired pay of Uniformed Service members 

after giving notice in the Federal Register. In the event of any such 

changes, the State will be given 45 days to terminate this agreement.



                          Article IV--Reporting



    Copies of Internal Revenue Service Form 1099R, ``Distribution From 

Pensions, Annuities, Retirement, or Profit Sharing Plan, IRAs, Insurance 

Contracts, etc.'' may be used for reporting withheld taxes to the State. 

The media for reporting (paper copy, magnetic tape, electronic file 

transfer, etc.) will comply with the state reporting standards that 

apply to employers in general.



                       Article V--Other Provisions



    A. This agreement shall be subject to any amendment of 10 U.S.C. 

1045 and any regulations issued pursuant to such statutory change.

    B. In addition to the provisions of Article III, the agreement may 

be terminated by a party to the Standard Agreement by providing the 

other party with written notice to that effect at least 90 days before 

the proposed termination.

    C. Nothing in this agreement shall be deemed to:

    1. Require the collection of delinquent tax liabilities of retired 

members of the Uniformed Services;

    2. Consent to the application of any provision of State law that has 

the effect of imposing more burdensome requirements upon the United 

States than the State imposes on other employers, or subjecting the 

United States or any member to any penalty or liability;

    3. Consent to procedures for withholding, filing of returns, and 

payment of the withheld taxes to States that do not conform to the usual 

fiscal practices of the Uniformed Services;

    4. Allow the Uniformed Services to accept payment from a State for 

any services performed with regard to State income tax withholding from 

the retired pay of Uniformed Service members.



[50 FR 47220, Nov. 15, 1985, as amended at 68 FR 36915, June 20, 2003]