604
Opinion of the Court
Furthermore, both federal and Kansas income tax law treat military retirement pay as deferred compensation for the purpose of determining deductibility of contributions to an individual retirement account (IRA). For federal purposes, an IRA deduction is limited to the amount of the taxpayer's compensation or $2,000, whichever is less. But the term "compensation" does not include "any amount received as a pension or annuity and does not include any amount received as deferred compensation." 26 U. S. C. § 219(f)(1). Under this provision, military retirement benefits are not compensation for the purpose of making deductible contributions to an IRA. See generally M. Weinstein, Mertens Law of Federal Income Taxation § 25C.12, p. 58 (1988). The State Supreme Court in this case noted that the Kansas tax law follows the federal scheme and does not treat military retirement pay as current compensation for IRA purposes, like other types of retirement benefits. 249 Kan., at 201-202, 815 P. 2d, at 56. The court believed that this treatment of military retirement pay was limited to the IRA context, id., at 202-203, 815 P. 2d, at 57, a position we find unpersuasive. The court's view ignores the importance of this provision to understanding that Congress for many purposes does not consider military retirement pay to be current compensation for current services. The State's position is weakened further by another fact, that Kansas tax law considers military retirement benefits as current compensation under its general income tax provision but it does not for IRA deductibility purposes. The court asserted that "the distinction is not so much the characterization as current income or deferred compensation, but rather active versus passive activities required to earn the income." Id., at 203, 815 P. 2d, at 57. But as the United States persuasively contends: "The State's failure to treat military retired pay consistently suggests that the State's articulated rationale is not in fact the basis for the disparate treatment, but only a cloak for discrimina-
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