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:

  • Alaska has no state personal income tax.
  • Florida imposes no personal income tax, per its Department of Revenue.
  • Nevada levies no personal income tax; its constitution bars one on the wages or personal income of individuals.
  • New Hampshire taxes no Social Security, pension, or retirement-account income; its Interest and Dividends Tax was repealed for tax periods beginning on or after January 1, 2025. It is not tax-free across the board: the state still levies a Business Profits Tax, whose definition of a taxable business organization reaches a proprietorship organized for gain or profit and carrying on business activity in New Hampshire, so a retiree with self-employment or rental income should not assume they are outside it.
  • South Dakota has no state personal income tax.
  • Tennessee has no state income tax; its Hall tax on interest and dividends was repealed in 2021.
  • Texas has no state income tax, which its constitution bars.
  • Washington has no individual income tax today, though a 9.9 percent income tax on annual adjusted gross income above $1 million, enacted by the 2026 Legislature, takes effect January 1, 2028.
  • Wyoming has no individual income tax.

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. The four types below sort out which break applies.

Which States Don't Tax 401(k) or IRA Withdrawals?

The nine states above with no general personal income tax don't tax 401(k) or IRA withdrawals at all. Among states that do levy an income tax, four in this guide exempt retirement plan withdrawals, each with its own condition:

  • Illinois subtracts IRA withdrawals and 401(k) distributions from income, with no age requirement and no dollar cap.
  • Mississippi exempts qualified retirement income from a private plan you joined while employed once you've met its requirements, and its regulation covers Keogh plans, IRAs and similar tax-deferred plans. An early distribution is taxable, and Roth IRA distributions are treated as under the Internal Revenue Code.
  • Pennsylvania doesn't tax an eligible plan distribution taken after retirement once you've reached the plan's retirement age or years of service, and treats an IRA withdrawal after retirement, disability, separation from service, or age 59½ as exempt as long as no early-withdrawal penalty is paid.
  • Iowa excludes distributions from listed plans, including pensions, IRAs, 401(k)s and 457(b)s, if you are 55 or older, disabled, or a qualifying surviving spouse or survivor.

In other states, look for a senior exclusion before assuming the full amount is taxed. Georgia's Retirement Income Exclusion covers taxable IRA distributions up to $35,000 per taxpayer at ages 62 to 64 and $65,000 at 65 and older, per its 2025 instruction booklet.

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.

Type What It Means Example States
No income tax No state income tax, so none on retirement income Florida, Texas, Nevada
Exempts all retirement income Income tax exists, but pensions, IRAs, and employer plans are exempt; some states exempt only a genuine retirement distribution, not an early one 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 General Personal Income Tax

Nine states levy no general personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Social Security, pensions, IRA withdrawals, 401(k) distributions, all of it is free of state income tax.

Florida is the clearest example. The Florida Department of Revenue says the state imposes no personal income tax, so Social Security benefits, public and private pensions, IRA withdrawals, and 401(k) distributions are all free of Florida income tax. The Florida Constitution bars any tax on the income of residents or citizens above what can be credited against or deducted from a similar federal or other-state tax.

No income tax doesn't mean no taxes. Sales and property taxes can still apply. Washington, for instance, taxes capital gains above a threshold even though it has no individual income tax today, and a separate 9.9 percent income tax on annual adjusted gross income above $1 million, enacted by the 2026 Legislature, takes effect there January 1, 2028. Tennessee and New Hampshire reached this group recently by repealing 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, IRA, or employer plan, 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 the Illinois Department of Revenue's list of exempt retirement income runs well past pensions, IRAs, and 401(k)s: it also covers the federally taxed part of Social Security, railroad retirement, state and local government deferred compensation plans, and government and military retirement plans. Those amounts are subtracted from income on Form IL-1040, with no age requirement and no dollar cap, and a plan type the list doesn't name is worth checking against it rather than assuming it's taxable. 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 doesn't tax Social Security, and exempts qualified retirement income, meaning retirement allowances, pensions and annuities paid under a public retirement system or a private plan you belonged to while employed. The exemption applies once you've met that plan's requirements: an earlier distribution isn't treated as retirement income and can be taxable. Its income tax regulation also covers Keogh plans, IRAs and similar tax-deferred plans, though an early distribution doesn't qualify and a Roth IRA distribution is treated as under the Internal Revenue Code. Mississippi also carries the exemption to the spouse or other beneficiary at the primary retiree's death, so a survivor annuity stays exempt. Pennsylvania draws the same line. It never taxes Social Security, and it does not tax a distribution from an eligible retirement plan taken upon or after retirement from service once you've reached the plan's retirement age or years of service, with no dollar cap. An IRA sets no retirement terms of its own, so the state treats a withdrawal taken after retirement, disability, separation from service, or age 59½ as exempt as long as no early-withdrawal penalty is paid. A distribution taken too early 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.

Watch one boundary. These states exempt qualified retirement income, meaning money from a recognized pension, IRA, or employer plan. 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. It doesn't tax Social Security, and its Retirement Income Exclusion, per the state's 2025 instruction booklet, runs per taxpayer up to $35,000 at ages 62 to 64, or younger if permanently and totally disabled, and up to $65,000 at 65 and older, covering pensions, annuities, taxable IRA distributions, 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. 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 pension, IRA, and 401(k) income that is federally taxable is generally taxable in Montana too. After a 2024 reform, the main break left for retirees is an additional subtraction for each taxpayer who has reached 65: $5,500 in statute, inflation-adjusted to $5,660 for tax year 2025, with the partial pension, annuity and IRA deduction repealed. Three subtractions cut into that general rule. Railroad retirement benefits are subtracted where federal law exempts them from state taxation. A retired service member may subtract military pension or military retirement income equal to the lesser of the Montana source wage income on the return (wages, business income, or farm income earned in the state) or 50 percent of that military retirement income, and a person who receives military survivor benefits may subtract up to 50 percent of that income. Both military subtractions carry the limits in MCA 15-30-2120(9): you must have become a Montana resident on or after June 30, 2023, or have been a resident before receiving the military retirement income and remained one after; each can be claimed for only 5 consecutive years once that residency condition is met; and neither is available if you claimed the exemption before becoming a nonresident. So a railroad retiree, a military retiree with Montana earnings, or a military widow or widower should not assume the whole payment is taxable. The Montana Department of Revenue administers these subtractions. Utah also taxes benefits, at its flat individual income tax rate, where they stay in adjusted gross income on the Utah return, and offsets the bill with income-tested credits: a Social Security Benefits Credit, a Retirement Credit worth up to $450 per person for taxpayers born on or before December 31, 1952, and a Military Retirement Credit for taxable military retirement pay. A taxpayer who claims the Retirement Credit may claim neither of the other two, and because the Retirement Credit tops out at $450 per person, the Social Security Benefits Credit or the Military Retirement Credit may be worth more.

Even where benefits are taxed, the bill can be smaller than the headline suggests. For the 2025 tax year, Utah's credit starts from the taxable benefits reported on your federal return multiplied by 0.045, the same 4.5 percent the state charged that year, so below the phase-out it cancels the Utah tax on those benefits entirely. Above the phase-out it shrinks rather than vanishing: the 2025 worksheet cuts the credit by 2.5 cents for every dollar of income over $54,000 for a single filer, $90,000 for a married couple filing jointly, a qualifying surviving spouse, or a head of household, or $45,000 for a married person filing separately. The income that worksheet measures is not your federal adjusted gross income; it builds the figure from your Utah taxable income, less municipal bond interest, plus federal tax-exempt interest. The credit is also nonrefundable, so it can take your Utah tax to zero but is never paid back beyond that. Utah's rate dropped to 4.45 percent for 2026, so work from the year's own worksheet rather than assuming the offset still lands exactly. 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.

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, lets you subtract New York government (state or local) and federal pensions at any age, to the extent they're in federal adjusted gross income (Optional Retirement Program members get only part), while qualified pension and annuity income gets a $20,000 exclusion per taxpayer at 59 1/2 or older for the full year, or, in the year you turn 59 1/2, on income received from that date. 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.

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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51 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: a 9.9 percent income tax on annual adjusted gross income above $1 million, enacted by the 2026 Legislature, takes effect there January 1, 2028, so a retiree with income below that level is unaffected. 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, which exempts retirement allowances, pensions and annuities paid under a public retirement system or an employer plan, and extends that exemption to a surviving spouse or other beneficiary, and Pennsylvania, which exempts a genuine retirement distribution with no dollar cap, such as an employer-plan payout after the plan's retirement age or years of service, or an IRA withdrawal after age 59½ that carries no early-withdrawal penalty. In those states a retiree living on a pension and employer plan withdrawals 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, which on the 2025 return cancels that tax entirely until the income figured on the credit's own worksheet passes $54,000 for a single filer or $90,000 for a joint return, after which the credit falls by 2.5 cents for every dollar above that line. 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. In New York, New York government and federal pensions can be subtracted at any age, to the extent they're in federal adjusted gross income, while other qualified pension and annuity income gets one $20,000 exclusion per taxpayer from 59 1/2 (in the year you turn 59 1/2, only on income received from that date). The state's 2025 Form IT-201 instructions count IRA payments and periodic 401(k) distributions, but not the part derived from contributions made after retiring. Other states 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. You can still owe sales or property tax in a state with no income 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 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 StateWhich states freeze property taxes for seniors, where low-income seniors can owe none, and how exemptions, credits and deferrals work, plus a guide per 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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