Where you retire decides how much tax you pay on the money you live on. Retirement income tax varies enormously by state: some states tax none of it, some tax all of it, and the rest land somewhere in between. The same pension that's tax-free in one state gets taxed in the one next door.

This guide explains the four kinds of state, how Social Security, pensions, and IRA or 401(k) money each get treated, and links to a detailed guide for all 50 states.

Which States Don't Tax Retirement Income?

The simplest way to owe zero state tax on retirement income is to live in one of the nine states with no general state personal income tax. These states tax no retirement income of any kind, not Social Security, not pensions, and not IRA or 401(k) withdrawals:

Beyond these nine, a state with an income tax may still shield retirement income, but the shape of the break differs sharply from state to state. Illinois subtracts Social Security, pensions, IRA withdrawals, and 401(k) distributions from income entirely, while Georgia exempts Social Security and caps the shelter on everything else at a dollar figure that rises with age. Which break applies depends on your state and the type of income, which is exactly what the four types below explain. For your state's precise treatment, follow its guide in the Learn More links.

The Four Kinds of Retirement Income Tax State

Every state's approach to retirement income tax fits one of four molds. Knowing which one your state uses tells you most of what you need: whether your Social Security is safe, whether your pension gets a break, and whether you owe anything at all.

Type What It Means Example States
No income tax Nothing is taxed, including retirement income Florida, Texas, Nevada
Exempts all retirement income Income tax exists, but pensions, IRAs, and 401(k)s are exempt; some states require you to have met the plan's retirement terms first Illinois, Mississippi, Pennsylvania
Exempts Social Security, taxes the rest Benefits are safe; a senior exclusion softens the bill on the rest Georgia
Taxes Social Security too Benefits themselves are taxable, subject to any state break Montana, Utah

Type 1: No Income Tax at All

Nine states levy no general personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If there's no income tax, there's nothing to tax your retirement income with. Social Security, pensions, IRA withdrawals, 401(k) distributions, all of it is free of state income tax.

Florida is the clearest example. The state has no personal income tax, which is barred by the Florida Constitution, so Social Security benefits, public and private pensions, IRA withdrawals, and 401(k) distributions are all free of Florida income tax. The Florida Department of Revenue confirms there's no individual income tax to collect. That's a big reason retirees flock there.

One caveat. No income tax doesn't mean no taxes. These states raise money some other way, usually through sales tax or property tax. Washington, for instance, taxes capital gains above a threshold even though it has no general income tax, and its legislature recently enacted an income tax on individuals with an annual adjusted gross income of $1,000,000 or more. Tennessee and New Hampshire reached this group recently by phasing out taxes they once levied on interest and dividends. Look at the whole tax picture, not just the income line.

Type 2: Income Tax, but Retirement Income Is Exempt

Some states do levy an income tax but carve retirement income out of it almost entirely. If your money comes from a pension, an IRA, or a 401(k), you pay little or nothing, even though a working neighbor pays the full rate on wages.

Start with Illinois. The state taxes other income at a flat 4.95 percent, but Social Security and railroad retirement benefits, public and private pensions, IRA withdrawals, and 401(k) distributions are all subtracted from income and exempt, with no age requirement and no dollar cap. The Illinois Department of Revenue spells out the subtraction. A retiree living entirely on those sources can owe Illinois nothing.

Mississippi works similarly, with one condition attached. It does not tax Social Security, and it fully exempts qualified retirement income including pensions, IRA withdrawals, and 401(k) distributions, but only once you have met your retirement plan's requirements: a distribution taken before you meet them is not treated as retirement income and can be taxable. Pennsylvania draws the same line. It does not tax Social Security, and it does not tax pension, IRA, or 401(k) money for a resident who has retired and met the plan's age or years-of-service requirements, with no dollar cap; an early distribution is taxable to the extent it exceeds contributions you already paid tax on. Iowa excludes qualifying retirement income from state income tax for eligible taxpayers, and age is only one route in: you qualify if you are 55 or older, disabled, or a qualifying surviving spouse or survivor. The exclusion covers distributions from listed plans such as pensions, IRAs, 401(k)s, and 457(b)s, but not nonqualified annuities. The details differ, so read your state guide, but the headline is the same: in these states, retirement money is treated far more gently than a paycheck.

Watch one boundary. These states exempt qualified retirement income, meaning money from a recognized pension, IRA, or 401(k). Income that doesn't fit the definition, such as wages from a part-time job or some annuity payments, can still be taxed at the regular rate. If you're working in retirement, sort your earned income from your retirement income, because the exemption may not cover both.

Type 3: Social Security Is Safe, the Rest Gets Taxed

States in this group don't tax Social Security, but they do tax pensions, IRAs, and 401(k) withdrawals, usually with a senior exclusion or exemption that shields a chunk of it.

Georgia is a good model. Georgia doesn't tax Social Security at all. On top of that, it offers a Retirement Income Exclusion: up to $35,000 per taxpayer for those ages 62 to 64, or under 62 and permanently and totally disabled, and up to $65,000 per taxpayer for those 65 and older, covering pensions, IRA and 401(k) withdrawals, interest, and dividends. A married couple who both qualify can each claim it. Only income above the exclusion gets taxed.

The exclusion amounts and ages vary widely from state to state. Some cap the break at a few thousand dollars; others, like Georgia, shield tens of thousands. Some apply only to government pensions, others to all retirement income. The pattern holds though: Social Security is protected, and a senior exclusion reduces the tax on everything else. Your state guide has the exact figures.

Type 4: The States That Still Tax Social Security

Some states tax Social Security benefits themselves. Whether that costs you anything depends on how much of your benefit is already taxable federally and on what break the state offers against it.

Montana is one. Montana taxes Social Security benefits to the same extent they're included in your federal taxable income, and it taxes pension, IRA, and 401(k) income too. After a 2024 reform, the main break left for retirees is an additional $5,500 subtraction, inflation-adjusted, for each taxpayer who has reached 65, with the older pension and annuity exclusions repealed. The Montana Department of Revenue administers it. Utah also taxes benefits, at its flat individual income tax rate with no exemption for them, and offsets the bill with one of two income-tested credits: the Social Security Benefits Credit, or a Retirement Credit worth up to $450 per person for taxpayers born on or before December 31, 1952. You claim one or the other, never both.

Even where benefits are taxed, the bill can be smaller than the headline suggests. Utah's credit equals the taxable benefits reported on your federal return multiplied by the state's flat rate, so below the phase-out it cancels the Utah tax on those benefits entirely. Montana's tax reaches only the portion of your benefit already included in federal taxable income, so a retiree whose benefit isn't taxed federally owes Montana nothing on it. Check your state guide for the current rule rather than a list you saw last year.

What Retirement Income Tax Hits: Social Security vs Pensions vs IRA and 401(k)

Within a single state, your three buckets of retirement money can be treated three different ways. Don't assume that because your pension is exempt, your IRA is too. Sort your income into these buckets and check each one.

Social Security. This is usually the most sheltered bucket. The federal government taxes part of it for higher-income retirees, and the Social Security Administration explains that federal side separately. Whether your state taxes benefits is a separate question with a state-specific answer: Georgia exempts them outright, Montana taxes them to the extent they're already in your federal taxable income. And where a state does tax them, the rule may turn on your income rather than being a flat yes or no, so read the threshold, not just the headline.

Pensions. Public and private pensions are taxed unevenly. A state may exempt government pensions while taxing private ones, or give a larger break to public retirees, and military retirement pay is sometimes carved out on its own. New York, for instance, fully exempts New York State, local government, and federal government pensions regardless of the recipient's age, while private pension, annuity, IRA, and 401(k) income gets only a $20,000 exclusion per taxpayer, and only for a taxpayer who was 59 1/2 or older for the entire tax year. If your pension is your main income, the pension rule is the one that matters most.

IRA and 401(k) withdrawals. These are usually treated together as ordinary income, but a senior exclusion often covers them the way it covers pensions. A Roth IRA withdrawal you've already paid tax on is generally tax-free at both levels. Where the IRS taxes a traditional withdrawal as income, your state often does too, minus any exclusion.

The point is that one state can exempt your pension, partly tax your IRA, and ignore your Social Security all at once. A state isn't simply "retiree-friendly" or not. It's friendly to specific kinds of income. Match your actual income mix against your state's rules.

Why Retirement Income Tax Matters for Paying for Care

For a retiree on a fixed income, state tax is one of the few costs you can actually plan around. Every dollar a state doesn't take is a dollar left for housing, medicine, or care. When the cost of care enters the picture, the difference between a state that exempts your pension and one that taxes it can run into thousands of dollars a year.

It matters most when you start drawing down savings to pay for care. A large IRA or 401(k) withdrawal to cover a year of assisted living or in-home help can push your taxable income up sharply. In a state that taxes those distributions, part of that withdrawal goes to state tax instead of care. In a no-tax state or one with a generous exclusion, more of it reaches the bill it was meant to pay.

So weigh the tax rule against your spending plan, not in isolation. If most of your income is Social Security, state income tax may barely move the needle, but confirm your own state's rule first, because some states do tax benefits. If you're living on a sizable pension or planning to tap retirement accounts to fund care, the state rule deserves real weight. It's one input in a larger funding picture that also includes property tax, the cost of care, and what each account costs you to withdraw.

Find Your State

Pick your state below for a detailed guide to how it taxes retirement income: whether it taxes Social Security, how it treats pensions and IRA or 401(k) money, the senior exclusions, and the age and income limits.

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All 50 states

Frequently Asked Questions

Which states don't tax retirement income at all?

Nine states have no general personal income tax, so they tax no retirement income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Washington carries one caveat: its legislature recently enacted an income tax on individuals with an annual adjusted gross income of $1,000,000 or more. A second group does have an income tax but exempts retirement income almost entirely: Illinois, with no age requirement and no dollar cap, plus Mississippi and Pennsylvania, which both exempt qualified retirement income once you have met your plan's retirement requirements. In those states a retiree living on pensions, IRAs, and 401(k) money can owe little or nothing.

Do any states tax Social Security?

Some do. Montana taxes Social Security benefits to the extent they're included in your federal taxable income, and Utah taxes them at its flat rate while offsetting the bill with an income-tested Social Security Benefits Credit that cancels the tax entirely below its phase-out. A taxpayer born on or before December 31, 1952 can instead claim a Retirement Credit of up to $450 per person, but never both. Whether your state taxes benefits is a state-by-state question, so open your state's guide for the current rule rather than relying on a list you saw last year.

Does my state tax my pension but not my IRA?

It can. A state might exempt government pensions, partly tax private pensions, and tax IRA or 401(k) withdrawals as ordinary income, all at once. New York splits its buckets exactly that way: state, local, and federal government pensions are fully exempt at any age, while private pension, annuity, IRA, and 401(k) income shares a single $20,000 exclusion per taxpayer, and that exclusion is available only if you were 59 1/2 or older for the entire tax year. Some give a single senior exclusion that covers all of them up to a dollar cap. Don't assume one bucket's treatment applies to the others. Sort your income by source and check each against your state's rules.

Should I move to a no-tax state to retire?

Not on the income tax alone. A state with no income tax has to raise the money somewhere else, usually through sales or property tax, so your total bill may not drop as much as you expect. Cost of living, proximity to family, healthcare access, and your specific income mix all matter more than the headline rate. Run your real numbers, and weigh income tax alongside property tax and the cost of care before you move.

Learn More

FinancialIs Social Security Taxable?Up to 85% of your Social Security can be taxed, based on your combined income. The formula, the thresholds, and the 2025 senior tax break explained. FinancialHow to Pay for Senior CareHow to pay for senior care: what it costs nationally and how Medicaid, Medicare, VA benefits, and private pay each fit. Who qualifies, what's covered, in 2026. FinancialBuild a Plan to Pay for Senior CareA step-by-step plan to pay for senior care: estimate the cost, inventory income and assets, find the payers you qualify for, sequence them, and get free help. FinancialUsing Retirement Accounts to Pay for CareHow to use a retirement account to pay for senior care: the tax on IRA and 401(k) withdrawals, the early-penalty exceptions, RMDs at 73, and the tax-spike trap. FinancialSenior Property Tax Relief by StateSenior property tax relief lowers what older homeowners owe through exemptions, freezes, credits, and deferrals. Learn how each works and find your state.

Find personalized help understanding how your state taxes retirement income at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.