Which States Tax Retirement Income?

The table shows the state's treatment of each kind of income for a retiree past the usual age limits. "Partly taxed" means the state excludes income up to a cap, or only below an income limit or above a certain age; the state page gives the amounts.

Rate tables hide most of what matters to a retiree, because the exclusions do the work. So each state page calculates the state income tax for the same three households, from the state's own rules. All are full-year residents taking the standard deduction, and the figures are state income tax only, without any county or city income tax; pension income is from a private employer and IRA figures are taxable withdrawals from traditional accounts.

Among these states the highest state income tax is $2,530 for the single retiree (Oregon), $5,261 for the couple with $145,000 of income (Oregon) and $17,622 for the couple with $290,000 (Oregon). In the states with no income tax, all three pay nothing. These are our calculations from each state's published rules, shown step by step on the state pages. They cover income tax only; property and sales taxes are described on each page but not added in, because they depend on the home and the spending.

Most states with an income tax start from the adjusted gross income on your federal return and then make their own additions and subtractions. For retirees the subtractions are what count. The common ones are the Social Security that the federal return taxed, some or all pension income, and a general exclusion for retirement income past a stated age.

The federal return taxes up to 85% of Social Security once other income passes thresholds that have never been indexed for inflation (IRS Publication 915). Most states do not follow that rule and exempt benefits completely. Pensions and retirement accounts are treated less evenly: some states exempt government pensions but not private ones, some exempt a fixed dollar amount per person, some only below an income limit, and some tax everything.

Two more differences surprise people who move. Few states give long-term capital gains and qualified dividends a lower rate, so a gain taxed at 15% federally is taxed at the state's ordinary rate on top. And exclusions with an income limit can be lost all at once: in a state where the limit works as a cliff, one large Roth conversion or home sale can cost the whole exclusion for that year. The state pages flag where that happens.

For the 2026 tax year, 8 states can tax Social Security benefits: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont. None of them taxes every recipient. Each exempts benefits below an income limit, at certain ages, or by a deduction that shrinks as income rises, so the tax falls mainly on households with substantial other income.

The list has been getting shorter. West Virginia's phase-out reached 100% of benefits for 2026, and Kansas, Missouri and Nebraska stopped taxing benefits in the two years before. Every other state, and the District of Columbia, either exempts Social Security or has no income tax to apply to it.

Whatever the state does, the federal tax on benefits stays. Our taxable Social Security calculator works through the federal worksheet, and the guide on when to claim covers the timing decision.

9 states have no broad personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. In these states Social Security, pensions, IRA and 401(k) withdrawals and Roth conversions are taxed only by the federal government.

Two of the nine need a footnote. New Hampshire taxed interest and dividends until it repealed that tax for periods beginning after 2024 (New Hampshire Department of Revenue Administration). Washington does not tax wages or retirement income but applies an excise tax to large long-term capital gains, which can reach a retiree who sells a concentrated stock position.

No income tax does not mean low tax. These states raise their money somewhere, usually from property tax, sales tax or both. The state pages for Florida and Texas put the weight where the cost is: homestead rules, assessment caps, and the exemptions that start at 65.

For a retired homeowner, property tax is often a larger bill than state income tax, and it does not fall when income falls. What matters is less the headline rate than the rules: whether assessed value is capped while you own the home, whether there is an exemption or freeze at 65, whether relief has an income limit, and whether any of it carries over if you move within the state. Each state page lists the programs with who qualifies.

Sales tax matters more the more you spend, and states differ on whether groceries and prescriptions are taxed. Estate and inheritance taxes matter to fewer households but for more money: some states tax estates at thresholds far below the federal exemption, and an inheritance tax is charged on what each heir receives, with rates that depend on how they are related to you. The estate tax calculator estimates the federal and state tax together.

A federal law settles the main question. Under 4 U.S.C. 114, a state may not tax the retirement income of a person who is not a resident of that state. Pensions, IRA and 401(k) distributions and most other qualified plan payments earned in one state are taxed, if at all, only by the state you live in when you receive them.

That makes residency the thing to get right. States tax their residents on all income, and each state decides for itself who is a resident, usually by domicile (your permanent home) and often also by a day count for people who keep a home there. A retiree who moves but keeps the old house can be claimed by both states. The states with the most to lose audit this, and the burden of proof sits with the taxpayer.

In the year of the move you are a part-year resident of both states, and timing can matter: a Roth conversion, a large capital gain or the sale of a business is generally taxed by the state where you are resident when it happens. Income from property or a business located in the old state stays taxable there after you leave.