For filing status Married Filing Jointly, Married Filing Separately on a Combined Return, or Married Filing Separately, the exclusion is the lesser of $12,000 or the taxable amount of the retirement income. For filing status Single, Head of Household, or Qualifying Widow(er), the exclusion is the lesser of $6,000 or the taxable amount of your retirement income. To take this exclusion each spouse must determine their eligibility independent of the other and the pensioner or retirement income recipient must meet one of the following conditions:
- You were 55 years of age or older on December 31, 2014.
- You are disabled.
- You are a surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion in 2014 on the basis of age or disability.
Married Filing Separately Filers: If both spouses have pension income and meet the eligibility requirements, the exclusion of up to $12,000 is prorated between each spouse. The prorated ratio relates each spouse's pension to the total pension received by both spouses. If only one spouse has pension income and meets the eligibility requirements, that spouse takes the entire exclusion of up to $12,000. The spouse who has no pension income receives no exclusion.