Tennessee has no state income tax on wages or retirement income, so it does not tax your Social Security, pensions, IRA withdrawals, 401(k) distributions, or investment income. The Hall income tax, which taxed certain interest and dividend income, was fully repealed for tax years beginning January 1, 2021.

This guide covers what Tennessee retirement income tax means today, what the Hall tax repeal changed, and what you still owe.

In This Guide

The Short Answer

Tennessee has no state income tax on wages or retirement income, so a pension or IRA withdrawal owes no Tennessee tax.

Investment income wasn't always this simple. Tennessee's Hall income tax historically taxed certain interest and dividend income. That tax is now gone. According to the Tennessee Department of Revenue, the Hall income tax was fully repealed for tax years beginning January 1, 2021. Since then, Tennessee has had no state income tax on wages or retirement income.

So whether you're asking about pensions, Social Security, 401(k) withdrawals, or dividend income, the state answer is the same: Tennessee imposes no tax on it, so the state tax on each is $0.

Tennessee Retirement Income Tax at a Glance

Here's how each common income source is treated at the state level.

Income Source Tennessee State Tax Federal Tax
Social Security None May apply, depending on income
Private pension None May apply
Public/government pension None May apply
Traditional IRA withdrawal None Yes, as ordinary income (less any nondeductible contributions)
401(k) distribution None May apply
Roth IRA (qualified) None None
Interest and dividends None (Hall tax repealed) Check IRS rules

Every state-tax entry reads "None," including interest and dividends, which used to carry the Hall tax. That column is the whole story now. On the federal side, Social Security is taxed only once your modified adjusted gross income plus one-half of your benefits passes a base amount set by your filing status, and a qualified Roth IRA distribution is tax-free.

How Tennessee Retirement Income Tax Works

It doesn't apply. Tennessee has no state income tax on wages or retirement income, so no income level triggers a state tax on your retirement income and there is no exemption cap to stay under.

A pension, an IRA or 401(k) withdrawal, a Social Security check, a stream of dividend income: Tennessee imposes no tax on any of them.

Relocating in retirement is a big decision, and the tax rules reward getting the details right. If you're moving to Tennessee, set up residency cleanly and document the move. Tennessee has no state income tax on retirement income, but ask your former state's tax agency how it treats the year you leave.

What the Hall Tax Repeal Changed

Before 2021, Tennessee had the Hall income tax, which taxed certain interest and dividend income.

That mattered for retirees with interest and dividend income from taxable investment accounts: under the Hall tax, some of that income could owe Tennessee tax.

That tax is fully repealed for tax years beginning January 1, 2021. Today there is no Hall tax to plan around. A retiree living on dividends and interest now owes Tennessee no tax on that income, the same as someone living on a pension.

What You Still Pay in Tennessee

No state income tax on your wages or retirement income doesn't mean no taxes. Tennessee still charges a sales tax, with a state portion and a local portion.

Federal income tax. Federal income tax still applies. All or some portion of a pension or annuity from a qualified employer retirement plan may be taxable by the IRS, unless it is a qualified distribution from a designated Roth account. Traditional IRA withdrawals are taxed as ordinary income, though not all of a withdrawal is taxable if you made nondeductible contributions. Social Security benefits become federally taxable only when your modified adjusted gross income plus one-half of your benefits passes a base amount that depends on your filing status, and at most 85 percent of them is ever taxed. Modified adjusted gross income is a federal measure that starts from your adjusted gross income and makes several adjustments, one of which adds back tax-exempt interest. If you're married, file separately, and lived with your spouse at any point in the year, that base amount is zero. Moving to Tennessee removes state income tax on your retirement income, not federal income tax.

Sales tax. The general state rate is 7 percent on most goods and taxable services, and local governments add their own rate of up to 2.75 percent. Food and food ingredients are taxed at a reduced state rate of 4 percent, and that figure is the state portion only. Prepared food, dietary supplements, candy, alcoholic beverages, and tobacco don't get the 4 percent rate. They stay at the general 7 percent state rate, plus the applicable local tax.

Property tax. Your property tax bill comes from your county, and from your city when the home is inside city limits. The state runs a Property Tax Relief program, administered by the Comptroller of the Treasury, that reimburses qualifying homeowners for part of their county property tax bill, and their city bill when the home is inside city limits. It has four separate qualifying tracks, and only one of them is about age.

Track Who qualifies Income limit Relief calculated on
Elderly homeowner You must be 65 on or before December 31, 2026 $38,470 or less: the maximum 2025 income of the applicant, spouse, co-owner, and resident remainder Maximum market value of $33,600
Disabled homeowner You must be disabled on or before December 31, 2026. Disability, not age, is the test, and this track is separate from the veteran tracks. The Robertson County trustee describes it as for those rated totally and permanently disabled by the Social Security Administration or other qualified agency $38,470 or less, measured the same way Maximum market value of $33,600
Disabled veteran homeowner A veteran who meets one of three disability routes: a service-connected disability from paraplegia or permanent paralysis of both legs and the lower body, legal blindness, or loss or loss of use of two or more limbs; 100% permanent total disability, as determined by the VA, from having been a prisoner of war; or VA-rated service-connected permanent and total disability. Uses consent form F-16 None. No income limit Maximum market value of $175,000
Unremarried surviving spouse The spouse of a veteran who met one of those three routes, or of a veteran whose death was service-connected and combat-related, or of a soldier whose death resulted from being deployed away from any home base of training in support of combat or peace operations. You must have been married at the death and not remarried. Uses consent form F-16S None. No income limit Maximum market value of $175,000

Every track also requires that you own the home and live in it as your primary residence. The disabled track is easy to overlook, because it is a separate track from the veteran ones. Its test is being disabled on or before December 31, 2026, not turning 65, and the home and income rules still apply. The surviving-spouse track is the other one to check closely: its last two routes need no VA disability rating at all. Income exactly at $38,470 also qualifies on the two income-limited tracks: the figure is a maximum, not a line you have to come in under. A dollar over it, and those two tracks close.

Relief is a payment of the tax on that capped value, and it is not an exemption: the state reimburses part or all of the property tax you paid, so you still get your tax bill and still have to pay it each year. The amount depends on your property assessment, your county or city tax rate, and your county appraisal ratio, so it varies by county and can change from year to year. The veteran tracks' $175,000 cap is more than five times the $33,600 cap, so their relief is correspondingly larger. You apply when your 2026 property tax bill arrives, to your county trustee, or to the city collecting official for property inside city limits. The deadline is 35 days after the delinquency date, and the taxes have to be paid by that date as well. See our Tennessee senior property tax relief guide for the full walk-through, and our senior property tax relief by state guide for how other states compare.

No estate or inheritance tax. Tennessee repealed its inheritance tax for deaths on or after January 1, 2016, and has no separate state estate tax, so your estate owes no state-level death tax. The federal estate tax can still apply to very large estates that exceed the federal exemption.

For families weighing how retirement income covers care, start with our guide on how to pay for senior care, our framework for building a senior care funding plan, and our overview of retirement accounts for care.

Frequently Asked Questions

Does Tennessee tax Social Security or pensions?

No. Tennessee has no state income tax on wages or retirement income, and it imposes no tax on Social Security benefits or pensions. Your Social Security may still be partly taxable on your federal return once your modified adjusted gross income plus one-half of your benefits passes a base amount set by your filing status.

Is the Hall income tax still in effect?

No. The Hall income tax on certain interest and dividend income was fully repealed for tax years beginning January 1, 2021. Tennessee now has no state income tax on wages or retirement income.

Does Tennessee tax IRA and 401(k) withdrawals?

No. Tennessee imposes no tax on IRA withdrawals or 401(k) distributions, because it has no state income tax on retirement income.

Which taxes still apply to Tennessee retirees?

Federal income tax can still apply: all or some portion of a pension or annuity from a qualified employer retirement plan may be federally taxable, unless it is a qualified distribution from a designated Roth account. Tennessee's sales tax applies at a 7 percent general state rate on most goods and taxable services, plus a local rate of up to 2.75 percent. Homeowners also get a county property tax bill, and Tennessee's Property Tax Relief program reimburses part of it for four groups: homeowners who are 65 by December 31, 2026, homeowners who are disabled by that same date, disabled veterans who meet one of three disability routes, and unremarried surviving spouses of qualifying veterans, including spouses of service members whose deaths were combat-related or happened on deployment.

Who qualifies for Tennessee's property tax relief?

Four separate tracks qualify, and only one of them is about age. Every track requires that you own the home and use it as your primary residence. A homeowner who is 65 on or before December 31, 2026, and a homeowner who is disabled on or before that same date, each qualify when the 2025 income of the applicant, spouse, co-owner, and resident remainder is at or under the $38,470 maximum. Your spouse's income counts even if your spouse lives elsewhere or is not on the deed, and you cannot get relief without your spouse's information, income, or signature. The disabled track is separate from the veteran tracks, and its test is disability by that date, not age; the Robertson County trustee describes it as for homeowners rated totally and permanently disabled by the Social Security Administration or other qualified agency. Separately, a disabled veteran homeowner who meets one of three disability routes (specified service-connected injuries, 100% permanent total disability from POW service, or VA-rated service-connected permanent and total disability) qualifies with no income limit. So does an unremarried surviving spouse of such a veteran, or of a veteran whose death was service-connected and combat-related, or of a soldier whose death resulted from being deployed away from any home base of training in support of combat or peace operations. Those last two routes need no disability rating.

Does Tennessee have an estate or inheritance tax?

No. Tennessee repealed its inheritance tax for deaths on or after January 1, 2016, and has no separate state estate tax, so a Tennessee estate owes no state-level death tax. A very large estate can still owe federal estate tax.

Next Steps

  • If you're moving to Tennessee, establish clean residency and document the move. Tennessee has no state income tax on retirement income.
  • If you own a home, check all four Property Tax Relief tracks before assuming you miss: 65 by December 31, 2026, disabled by that date, a disabled veteran, or a qualifying veteran's unremarried surviving spouse, including the spouse of a service member killed in combat or on deployment. The two veteran tracks carry no income limit at all.
  • Plan your federal withdrawals. Having no Tennessee income tax on retirement income doesn't change your federal bill: all or some of a pension or annuity from a qualified employer retirement plan may still be federally taxable.
  • Map income against care costs. Read our guide to paying for senior care and retirement accounts for care.

Learn More

FinancialTennessee Senior Property Tax ReliefTennessee property tax relief reimburses homeowners 65+ with 2025 income of $38,470 or less. See the four tracks, the value caps, and how to file on time. FinancialHow Each State Taxes Retirement IncomeNine states tax no retirement income, and four more exempt qualifying retirement plan withdrawals. See how every state taxes Social Security, pensions and IRAs. 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. FinancialBuilding a Senior Care Funding PlanA 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. FinancialRetirement Accounts 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. FinancialHow to Pay for Senior Care in TennesseeHow to pay for senior care in Tennessee in 2026: costs, Medicare's limits, TennCare CHOICES long-term care, VA Aid and Attendance, and long-term care insurance.

Find personalized help planning retirement income for senior care 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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