Tennessee does not tax any of your retirement income. The state has no income tax at all, so Social Security, pensions, IRA withdrawals, 401(k) distributions, and investment income are all free of state tax: the Tennessee bill on every one of them is $0. The old tax on interest and dividends is gone.

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 taxes none of your retirement income. There's no state income tax to file and no state withholding on a pension or IRA.

This wasn't always quite true. For decades Tennessee had no tax on wages but did tax certain interest and dividend income through the Hall income tax. 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 According to the Tennessee Department of Revenue, the Hall income tax was fully repealed for tax years beginning January 1, 2021.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 personal income tax of any kind.

So whether you're asking about pensions, Social Security, 401(k) withdrawals, or dividend income, the state answer is the same. Tennessee taxes none of it.

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 Yes
Public/government pension None Yes
Traditional IRA withdrawal None Yes
401(k) distribution None Yes
Roth IRA (qualified) None None
Interest and dividends None (Hall tax repealed) Yes

Every state-tax entry reads "None," including interest and dividends, which used to carry the Hall tax. That column is the whole story now.

How Tennessee Retirement Income Tax Works

It doesn't. No income level triggers it, and nothing is exempt only up to a cap, because there's no income tax to cap.

A pension, a required minimum distribution, a Social Security check, a stream of dividend income: Tennessee taxes all of them at zero. There's no Tennessee retirement exclusion to claim and no senior credit, because you owe no state income tax. You also don't file a Tennessee income tax return.

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. The state taxes residents at zero, but a former state may still tax income earned while you lived there. Get a Tennessee driver's license, register to vote, and document the move.

What the Hall Tax Repeal Changed

For most of Tennessee's history, the catch was the Hall income tax. It didn't touch wages or pensions, but it taxed certain interest and dividend income at a flat rate until lawmakers began phasing it out.

That mattered for retirees, who often live partly on dividends and interest from taxable investment accounts. Under the old Hall tax, a retiree with significant dividend income could owe Tennessee tax even though the state didn't tax wages.

The legislature phased the rate down over several years and eliminated it entirely 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 nothing on that income, the same as someone living on a pension.

What You Still Pay in Tennessee

No income tax doesn't mean no taxes. Tennessee funds itself in other ways.

Federal income tax. The IRS still taxes pension income, traditional IRA and 401(k) withdrawals, and often part of Social Security benefits. How much of your Social Security is taxable depends on your total income, so a Tennessee retiree with other income can still owe federal tax on part of those benefits. Moving to Tennessee zeroes out the state bill, not the federal one.

Sales tax. This is where Tennessee leans. The state rate is 7 percent, and local governments add up to 2.75 percent, so the average combined rate is about 9.61 percent, among the highest in the country. Groceries are taxed at a reduced state rate of 4 percent. Sales tax is the state's main revenue source, and day-to-day spending carries it.

Property tax. Tennessee property taxes are set and collected locally, and the state runs a Property Tax Relief program that reimburses qualifying homeowners for part of their county property tax bill, and their city bill where one applies. 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
Totally and permanently disabled homeowner You must be disabled on or before December 31, 2026. No age requirement, and no military service required $38,470 or less, measured the same way Maximum market value of $33,600
Disabled veteran homeowner A veteran who meets the program's qualifying service-connected disability standard, with consent form F-16 None. No income requirement and no income limit Maximum market value of $175,000
Unremarried surviving spouse of a qualifying disabled veteran A surviving spouse who has not remarried, with consent form F-16S None. No income requirement and no income limit Maximum market value of $175,000

The disabled track is the one people miss, because it is not a veterans' benefit. A homeowner who is totally and permanently disabled qualifies on that basis alone, at any age, with military service nowhere in the test. 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.

Because the reimbursement is that capped market value multiplied by your local tax rate, the dollar amount varies by county, and it is substantially larger on the two veteran tracks. 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, but only to very large estates above 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, so it taxes neither Social Security benefits nor pensions. Your Social Security may still be partly taxable on your federal return.

Is the Hall income tax still in effect?

No. The Hall income tax on interest and dividends was fully repealed for tax years beginning January 1, 2021. Tennessee now has no personal income tax of any kind.

Does Tennessee tax IRA and 401(k) withdrawals?

No. Traditional IRA withdrawals and 401(k) distributions are free of Tennessee state tax. The state has no income tax to apply to them.

What taxes do Tennessee retirees still pay?

Federal income tax, Tennessee sales tax, and local property tax. Sales tax is the state's principal source of tax revenue. Tennessee's Property Tax Relief program reimburses part of the local property tax bill for four groups: homeowners 65 or older, homeowners of any age who are totally and permanently disabled, disabled veterans who meet the program's service-connected disability standard, and those veterans' unremarried surviving spouses.

Who qualifies for Tennessee's property tax relief?

Four separate tracks qualify, and only one of them is about age. A homeowner who is 65 on or before December 31, 2026, and a homeowner of any age who is totally and permanently disabled on or before that same date, each qualify when the maximum 2025 income of the applicant, spouse, co-owner, and resident remainder is $38,470 or less; income exactly at $38,470 still qualifies. You do not have to be a veteran to use the disabled track, and there is no minimum age on it. Separately, a disabled veteran homeowner who meets the program's qualifying service-connected disability standard, and that veteran's unremarried surviving spouse, qualify with no income requirement and no income limit.

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 so your former state can't keep taxing you. Tennessee itself taxes none of your retirement income.
  • If you own a home, check all four Property Tax Relief tracks before assuming you miss: 65 or older, totally and permanently disabled at any age, a disabled veteran, or a disabled veteran's unremarried surviving spouse. The two veteran tracks carry no income limit at all.
  • Plan your federal withdrawals. No state tax doesn't change your federal bill.
  • 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's Property Tax Relief pays qualifying seniors a check each year. See which of the three tracks you qualify for and how to file with your trustee. FinancialHow Each State Taxes Retirement IncomeRetirement income tax varies enormously by state. Learn how states treat Social Security, pensions, and IRA or 401(k) money, and find your state's rules. 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 free 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. 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 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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Brevy Care Team

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