State Income Tax Guide for Retirees 2026
How State Taxes Affect Your Retirement Income
When planning for retirement, most people focus on federal taxes — but state taxes can have an equally significant impact on your retirement nest egg. Depending on where you live, you could pay nothing in state income tax, or you could see a large portion of your Social Security, pension, and 401(k)/IRA withdrawals go to the state.
This guide covers all 50 states and the District of Columbia, showing:
- Whether the state has an income tax (and the rate ranges)
- Whether Social Security benefits are taxed
- Whether pension income is taxed
- Whether 401(k) and IRA withdrawals are taxed
- Special exemptions and retirement income exclusions
8 states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee (starting 2021/2022) no longer tax wages or salaries, though NH still taxes interest and dividends (being phased out through 2027).
⚠️ Tax laws change frequently. Always verify current rates and rules with the appropriate state tax authority before making relocation decisions.
| State | Income Tax Rate | Taxes SS? | Taxes Pension? | Taxes 401(k)/IRA? | Notes |
|---|---|---|---|---|---|
| 🌲 Northeast Region | |||||
| Connecticut | 3% – 6.99% | Yes | Partial | Yes | SS taxable above $75K (single) / $100K (joint) AGI. Pension/retirement exclusion up to $14,250 for those 65+ (phase-out applies). |
| Maine | 5.8% – 7.15% | No | No | Yes | SS and pension income fully exempt for those 65+ with income below $40K (single) / $47K (joint). Partial exemption above. |
| Massachusetts | 5% (flat) | No | No | Yes | Flat 5% rate. SS and most pension income exempt. An additional 4% surtax applies to income over $1M (Question 1). |
| New Hampshire | 5% (interest & dividends only)* | No | No | No | *No tax on wages/salaries/pensions/SS. Interest & dividends tax (5%) is being phased out — fully repealed after 2027. Effectively no tax for most retirees. |
| New Jersey | 1.4% – 10.75% | No | Partial | Yes | SS exempt. Pension/retirement income exclusion up to $75K (single) / $100K (joint) for 65+. Principal residence property tax relief available (Senior Freeze). |
| New York | 4% – 10.9% | No | Yes | Yes | SS exempt. Pension income taxable. IRA/401(k) withdrawals fully taxable. High-tax state overall; local income taxes also apply in NYC/Yonkers. |
| Pennsylvania | 3.07% (flat) | No | No | No | PA does NOT tax SS, pensions, or retirement account withdrawals for those 60+. Very retirement-friendly flat tax structure. |
| Rhode Island | 3.75% – 5.99% | Yes | Partial | Yes | SS taxable above $81,900 (single) / $102,900 (joint). Qualified retirement income exclusion up to $20K/person for 65+. |
| Vermont | 3.35% – 8.75% | Yes | Yes | Yes | SS taxable (conforms to federal taxation). Retirement income exclusion available for those 65+ with AGI under $50K. One of the least retirement-friendly states. |
| 🌴 Southeast Region | |||||
| Alabama | 2% – 5% | No | No | No | SS and pension income fully exempt for retirees. Very retirement-friendly. Federal income tax subtraction also available. |
| Arkansas | 2% – 4.9% | No | No | Yes | SS exempt. Pension exempt for 60+. IRA/401(k) withdrawals taxable but a retirement savings account deduction is available (up to $6K/person 65+). |
| Delaware | 2.2% – 6.6% | No | Partial | Yes | SS exempt. Pension exclusion up to $12,500 for 65+ (applies to pension + other retirement income combined). $110 "senior credit" available. |
| Florida | None | No | No | No | No state income tax. SS, pensions, and 401(k)/IRA withdrawals all tax-free at state level. High property insurance costs offset tax savings. |
| Georgia | 1% – 5.75% | No | No | Yes | SS exempt. Retirement income exclusion: up to $35K/person (65+) for pension, 401(k), IRA. $65+ requires minimum retirement age from plan. |
| Kentucky | 4% (flat) | No | No | No | SS and pension income fully exempt. Flat 4% rate on other income. Very retirement-friendly as of recent reforms. |
| Louisiana | 1.85% – 4.25% | No | No | Yes | SS exempt. Pension exclusion up to $6K (65+). IRA/401(k) withdrawals taxable but partial exemption available. Special hurricane-related tax provisions. |
| Maryland | 2% – 5.75% | No | Partial | Yes | SS exempt. Pension exclusion up to $39,500 (single) / $79,000 (joint) for 65+. Local income taxes (county) add 2.25%–3.2% on top. |
| Mississippi | 0% – 5%* | No | No | No | *Income tax being phased out (0% by 2030). SS, pensions, and retirement withdrawals fully exempt. Extremely retirement-friendly. |
| North Carolina | 4.5% (flat)* | No | Yes | Yes | *Rate declining (targeting 3.99% by 2027). Flat tax. SS exempt but all other retirement income fully taxable. Deduction available for those 65+ ($2K–$4K). |
| South Carolina | 0% – 6.4% | No | Partial | Yes | SS exempt. Retirement income deduction up to $10K (65+) or $3K (60–64). Qualified retirement plans partially deductible. Generous homestead exemption. |
| Tennessee | None | No | No | No | No state income tax. Hall income tax (on interest/dividends) fully repealed as of 2021. Very retirement-friendly. |
| Virginia | 2% – 5.75% | No | Yes | Yes | SS exempt. Pension and 401(k)/IRA withdrawals fully taxable. Age 65+ subtraction available ($12K/person). Military retirement pay fully exempt. |
| West Virginia | 2.36% – 5.12% | Yes | Yes | Yes | SS taxable (conforms to federal). Retirement income exclusion available for 65+ with income under $35K. Social Security subtraction available for low-income seniors. |
| 🌾 Midwest Region | |||||
| Illinois | 4.95% (flat) | No | No | No | Flat 4.95%. SS, pensions, and all retirement account withdrawals exempt. Very retirement-friendly. High property taxes. |
| Indiana | 3.05% (flat)* | No | No | Yes | *Rate declining toward 3% by 2027. Flat tax. SS and pension exempt for 65+ (or 62+ if disabled). 401(k)/IRA taxable. County taxes add ~0.5%–2%. |
| Iowa | 4.4% – 5.7%* | No | No | No | *Major tax reform — rates declining, targeting flat 3.9% by 2026. SS exempt. Pension and retirement account withdrawals exempt for 55+. |
| Kansas | 3.1% – 5.7% | Yes | Partial | Yes | SS taxable above $75K (single) / $100K (joint). Retirement benefits exclusion available for 65+ (up to $1,500–$3,500 depending on income). |
| Michigan | 4.25% (flat) | No | No | Yes | Flat 4.25%. SS and pension exempt for 65+ (or 62+ if disabled). 401(k)/IRA withdrawals taxable. Senior property tax credit available. |
| Minnesota | 5.35% – 9.85% | Yes | Yes | Yes | SS taxable (conforms to federal). Social Security subtraction available for low-income seniors. Pension/retirement income fully taxable. High-tax state. |
| Missouri | 1.5% – 4.8%* | Yes | Partial | Yes | *Rate declining (targeting 4.5% top by 2027). SS taxable above $85K (single) / $100K (joint). MO public pension exempt; private pension partially exempt. |
| Nebraska | 2.46% – 6.84% | Yes | Partial | Yes | SS taxable above $43K (single) / $57K (joint). Retirement income exclusion up to $4,800 (65+). Pension exclusion available. Rates declining toward flat ~3.99%. |
| North Dakota | 1.95% – 2.5% | Yes | Yes | Yes | SS taxable (conforms to federal). Retirement income exclusion available for 65+ with income under $50K. Low overall rates make it manageable. |
| Ohio | 0% – 3.5% | No | Partial | Yes | SS exempt. Retirement income credit up to $200 (65+). Pension and 401(k)/IRA taxable but 65+ get $50–$200 credit. Military retirement pay exempt. |
| South Dakota | None | No | No | No | No state income tax. All retirement income tax-free at state level. High sales tax (4.2% + local). No corporate income tax either. |
| Wisconsin | 3.54% – 7.65% | No | Partial | Yes | SS exempt. Retirement income exclusion up to $5K (65+). Pension income partially exempt. IRA/401(k) withdrawals taxable. Homestead credit available. |
| 🌵 Southwest Region | |||||
| Arizona | 2.55% (flat)* | No | No | Yes | *Flat rate (reduced from graduated in 2023). SS exempt. Pension exempt for 65+ (or 62+ disabled). 401(k)/IRA taxable but $2.5K subtraction (65+). |
| New Mexico | 1.7% – 5.9% | Yes | Partial | Yes | SS taxable above $8K (single) / $16K (joint) for 65+. Retirement income exclusion up to $8K (65+). Low-income seniors may qualify for full exemption. |
| Oklahoma | 0.25% – 4.75% | No | Partial | Yes | SS exempt. Pension exemption up to $10K (65+). 401(k)/IRA taxable. Retirement income deduction available. Low overall tax burden. |
| Texas | None | No | No | No | No state income tax. All retirement income tax-free at state level. High property taxes offset income tax savings. No franchise tax on individuals. |
| 🏔️ West Region | |||||
| Alaska | None | No | No | No | No state income tax. No sales tax (state level). Permanent Fund Dividend paid annually to residents. High cost of living. |
| California | 1% – 13.3% | No | Yes | Yes | SS exempt. All other retirement income fully taxable. Top rate 13.3% (including Mental Health Services Act tax). High-tax state. Prop 13 property tax protections for seniors. |
| Colorado | 4.4% (flat) | Yes | Yes | Yes | SS taxable (conforms to federal). Retirement income exclusion available for 65+ (up to $24K/person, phased out at higher incomes). Flat rate applies to all income. |
| Hawaii | 1.4% – 11% | No | Partial | Yes | SS exempt. Pension partially exempt (federal portion). 401(k)/IRA taxable. High cost of living. Low-income seniors may qualify for exemptions. |
| Idaho | 5.8% (flat)* | No | Yes | Yes | *Flat rate (formerly graduated). SS exempt. Pension and 401(k)/IRA taxable. Credit available for 65+ ($20–$60). Rates being reviewed for cuts. |
| Montana | 1% – 6.75% | Yes | Yes | Yes | SS taxable above $25K (single) / $32K (joint). Retirement income exclusion up to $4,680 (65+). All retirement withdrawals taxable. High property taxes. |
| Nevada | None | No | No | No | No state income tax. All retirement income tax-free. High sales tax (6.85% + local). Gaming/recreation economy. No state lottery. |
| Oregon | 4.75% – 9.9% | No | Yes | Yes | SS exempt. Pension and 401(k)/IRA fully taxable. Federal tax credit (subtracts federal tax paid from OR tax). No sales tax. High-income tax burden. |
| Utah | 4.65% (flat) | Yes | Yes | Yes | SS taxable but credit available for 65+ (phases out at higher incomes). Flat 4.65%. All retirement income taxable. Pension/retirement credit available. |
| Washington | None* | No | No | No | *No personal income tax. Capital gains excise tax (7%) on gains over $250K (applies to realized gains, not retirement account withdrawals). High property/sales taxes. |
| Wyoming | None | No | No | No | No state income tax. All retirement income tax-free. Low property taxes. No state lottery. Relies on mineral extraction taxes. |
| 🏛️ District of Columbia | |||||
| District of Columbia | 4% – 10.75% | No | Partial | Yes | SS exempt. Retirement income exclusion up to $12K (65+). 401(k)/IRA taxable above exclusion. High-income tax rates. Property tax relief available for seniors. |
Quick Summary: Most Retirement-Friendly States
Based on state income tax treatment of retirement income, the most retirement-friendly states include:
- No income tax: AK, FL, NV, SD, TN, TX, WA, WY
- Exempt SS + pensions + 401(k)/IRA: AL, IL, IA (55+), KY, MS, PA (60+)
- Partial exemptions available: AZ, AR, DE, GA, IN, MI, SC, WI
States generally considered less retirement-friendly due to taxing SS and having high rates include: CA (high rates), CT, MN, NE, NM, ND, RI, UT, VT, WV. However, some offer exemptions at lower income levels.
Frequently Asked Questions
No. In fact, the majority of states do not tax Social Security benefits. As of 2026, the following states tax Social Security (either fully or above certain income thresholds): Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. All other states either exempt Social Security entirely or conform to federal exemption rules.
Eight states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Additionally, New Hampshire does not tax wages or salaries (and is phasing out its interest and dividends tax through 2027), making it effectively tax-free for most retirees.
It depends on the state. States with no income tax obviously don't tax these withdrawals. Among states with an income tax, some exempt all retirement account withdrawals (IL, AL, PA for those 60+, KY, MS), while others tax them fully (CA, NY, MN). Many states offer partial exemptions or deductions for those over a certain age (typically 65). Always check the specific state's rules for retirement income deductions.
Many states offer special exemptions for military retirement pay. As of 2026, states that fully exempt military retirement pay include: AL, AR, CT, FL, HI, IL, IN, IA, KS, KY, MA, MI, MS, MO, NJ, NY, NC, OH, OK, PA, SC, SD, TN, TX, VA, WA, WI, WY, and DC. Some states provide partial exemptions or require certain service conditions. This is a separate benefit from general pension exemptions.
Not necessarily. While no-income-tax states save you on income taxes, they often make up the revenue through other means:
- Higher property taxes: TX, NH, FL have high property taxes
- Higher sales taxes: TN, WA, NV have high sales tax rates
- Higher cost of living: WA, AK have high overall costs
- Fees and excise taxes: Many states use these to replace income tax revenue
The best approach is to calculate your total tax burden (income + property + sales) in your current state vs. a potential new state, and factor in proximity to family, healthcare quality, and climate preferences.
Yes. State tax laws change frequently — sometimes every year. Recent examples include Mississippi phasing out its income tax entirely, Iowa moving to a flat rate and exempting retirement income, and Missouri reducing its top rates. Always verify current tax rules with the state's Department of Revenue before making relocation or withdrawal decisions. This guide reflects laws in effect as of mid-2026.