Oklahoma excludes from state taxes 100 percent of what federal retirees paid into the old Civil Service Retirement System, though many retirees, and even tax preparers, miss that fact, expert says.

Some retired federal employees of Tinker Air Force Base, the U.S. Postal Service or the Veterans Health Administration who paid into the old Civil Service Retirement System inadvertently could be paying state taxes that they don’t owe.

Since the 2011 tax year, Oklahoma excludes from state taxes 100 percent of what those federal retirees paid into the Civil Service Retirement System in lieu of Social Security. The tax savings means those retirees can keep hundreds of dollars more a year, experts say. For example, a federal retiree whose pension totals $37,000 annually would save $836 under the state tax exclusion.

Still, many retirees and tax preparers miss that fact, and continue to overpay hundreds of dollars in state taxes, said Sean Reed of Reed’s Tax Service in Midwest City. People can file an amendment on past returns to recoup overpayment, but only for the three previous years, he said.

Some federal retirees could be overpaying Oklahoma taxes