Retirement taxes across the U.S.: How does your state stack up?
Where you retire determines how much of your income you actually keep. State tax rules vary so dramatically that the same pension, the same Social Security check, and the same IRA withdrawal can mean a very different bill depending on your zip code.
Not all states tax retirement income. Some exempt it entirely. Some tax it partially. And some tax it aggressively enough that the choice of state can cost a retiree thousands of dollars a year.
The data below comes from Kiplinger’s guide to retirement taxes across all 50 states, updated February 2026. Find your state below.
The states that don’t tax retirement income at all
Alaska
No personal income tax. Social Security, pensions, and all retirement distributions are completely tax-free at the state level.
Florida
Florida imposes no income tax and no estate or inheritance taxes. Every dollar of retirement income is yours to keep.
Nevada
No income tax. No estate or inheritance taxes. All retirement income is tax-free.
New Hampshire
No income tax at the state level. New Hampshire also eliminated its dividend and interest income tax as of 2025.
South Dakota
With no income tax and no estate or inheritance tax, South Dakota keeps the government out of your retirement income entirely.
Tennessee
No income tax and no estate or inheritance tax. All retirement income is fully exempt.
Texas
No personal income tax and no estate or inheritance taxes. No retirement income is taxable at the state level.
Washington
No personal income tax. Retirement income is not taxed, though Washington does impose a capital gains tax of 7% on investment gains exceeding a threshold.
Wyoming
No personal income tax. All retirement income is exempt from state taxation.
States that exempt most retirement income
Alabama
Social Security and pensions are not taxable. The first $6,000 of IRA and 401(k) distributions is tax-exempt for retirees 65 and older. Income tax rates range from 2% to 5%.
Hawaii
Social Security and pension income are untaxed here. But what remains taxable faces rates as high as 11%, and estates over $5.49 million face additional tax.
Illinois
Flat income tax of 4.95%, but fully exempt, including Social Security, pensions, and IRA distributions.
Iowa
Residents 55 and older have retirement income exempt from any kind. Iowa also scrapped its inheritance tax in 2025. The flat rate on other income is 3.8%.
Michigan
Beginning with tax year 2026, Michigan has effectively phased out state income tax on most retirement and pension benefits, including defined-benefit pensions and IRA distributions.
Mississippi
All retirement income is exempt. The flat income tax rate on other taxable income is 4.4% for 2025, dropping to 4% in 2026.
Pennsylvania
No traditional retirement income is taxed. Other income is taxed at a flat 3.07%, though local income taxes may also apply.
States that offer partial relief
Arizona
Flat income tax of 2.5%. Social Security is not taxable. Pension income qualifies for an exemption of up to $2,500.
Arkansas
A $6,000 deduction on eligible retirement income is available for retirees 59.5 and older. Income tax rates range from 0% to a higher bracket for larger incomes.
Colorado
Flat rate of 4.4%. Social Security is partially taxable, but retirees 65 and older can deduct $24,000 of retirement income. Those 55 to 64 may deduct up to $20,000.
Connecticut
Social Security is not taxed for single filers with AGI below $75,000 ($100,000 joint). A recent tax relief bill is phasing out these income thresholds for all Social Security recipients.
Delaware
Taxpayers 60 and older can deduct up to $12,500 of qualified retirement plan income. Social Security is not taxable. Income tax rates range up to 6.6%.
Georgia
Retirees 62 and older may exclude up to $35,000 of retirement income. At 65, that exclusion rises to $65,000. Social Security is not taxed.
Idaho
Most retirement income is taxable at a flat rate of 5.8%. Social Security is not taxed. No estate or inheritance tax.
Indiana
Social Security is exempt. Most other retirement income is taxable at a flat rate of 3.05%. No estate or inheritance tax.
Kansas
Social Security is not taxed. Pensions and IRA distributions are taxable, with limited exemptions based on adjusted gross income. Rates range from 3.1% to 5.7%.
Kentucky
A $31,110 deduction is available for some retirement plans. Social Security is not taxed. Flat income tax rate of 4%.
Louisiana
Social Security is not taxed. Retirees 65 and older receive an income exclusion of up to $6,000. Rates range from 1.85% to 4.25%.
Maine
Some retirement income is taxable, but a pension deduction of up to $48,216 applies. Maine has an estate tax with a $6.8 million exemption.
Maryland
Social Security is not taxed. Retirees 65 and older can deduct up to $42,000 of pension income. Maryland has both an estate tax and an inheritance tax.
Missouri
Effective 2024, Social Security benefits are completely free of state income tax. Other retirement income is taxable at rates from 2% to 4.8%.
Nebraska
Social Security is no longer taxed as of 2025. Other retirement income remains taxable at rates from 2.46% to 5.84%.
New Jersey
Retirees 62 and older can deduct a significant portion of retirement income. An additional $6,000 senior deduction is available at 65 for filers with federal AGI under $150,000.
New Mexico
Social Security is exempt for most residents. Taxpayers 65 and older can deduct up to $8,000 of other taxable income. Rates range from 1.7% to 5.9%.
New York
Taxpayers 59.5 and older can deduct up to $20,000 of qualified retirement income. Social Security is not taxed. Rates range from 4% to higher brackets.
North Carolina
Most retirement income is taxable at a flat rate of 3.99% for 2026, with the rate set to decrease in the coming years.
North Dakota
Recent legislation made income tax more affordable for retirees. The maximum rate on taxable retirement income is 2.5%, with a wide zero-rate bracket.
Ohio
Most retirement income is taxable. Rates range from 2.75% to 3.125%, moving to a flat 2.75% in 2026. Military retirement pay is exempt. No estate or inheritance tax.
Oklahoma
Retirees 65 and older receive an income tax exemption of up to $10,000. No state estate or inheritance tax.
South Carolina
A retirement income exclusion of up to $15,000 applies. Social Security is not taxed. Rates range from 0% to 6.2%.
Virginia
Retirees 65 and older may deduct up to $12,000 of retirement income, subject to income thresholds. Most other retirement income is taxable.
West Virginia
For 2026 and beyond, Social Security is fully exempt from state income tax, completing a three-year phase-out. Other retirement income remains taxable.
Wisconsin
Social Security is exempt entirely. Taxpayers 65 and older are exempt from tax on income from federal, state, and local retirement plans, including military benefits.
The states where retirees pay more
California
Kiplinger ranks California as one of the worst states for retirement taxes. Income tax rates range from 1% to 13.3% across nine brackets. IRA and 401(k) distributions are fully taxable. Social Security is not taxed.
Massachusetts
Flat income tax of 5% on most retirement income. An estate tax applies to estates over $2 million, with rates reaching 16%.
Minnesota
Most retirement income is taxable. The lowest bracket is high compared to other states. An estate tax applies to estates over $3 million.
Montana
Most retirement income is taxable at rates from 4.7% to 5.9%. Retirees can deduct up to $5,500 of qualified retirement income.
Oregon
Most retirement income is taxable at rates up to 9.9%. An estate tax applies to estates over $1 million.
Rhode Island
Most retirement income is taxable. Military pensions are exempt. Some pension and annuity income qualifies for a $20,000 exemption.
Utah
Most retirement income is taxable at a flat 4.5%. Eligible retirees can claim a retirement tax credit of up to $450.
Vermont
Most retirement income is taxable. Social Security recipients with an AGI of $65,000 or less (joint filers) may qualify for an exemption.
Washington, DC
Most retirement income is taxable at rates from 4% to 10.75%. A $3,000 retirement income deduction is available. An estate tax applies to estates over $4.87 million.
Wrap up
Tax treatment of retirement income varies more than most people realize until they start comparing states directly. Kiplinger’s full guide covers every jurisdiction in detail and is worth reading before choosing a retirement destination.
Ask us! What questions do you have about content, strategy, pop culture, lifestyle, wellness, history or more? We may use your question in an upcoming article!
Related:
- 10 cheapest places to live in Florida, according to the data
- 50 of the cheapest places to live in the US
Like MediaFeed’s content? Be sure to follow us.
This article was syndicated by MediaFeed.co.
