How big of a bite will state taxes take out of your retirement and Social Security income? It depends on where you decide to retire.
Some states:
- impose no income tax on retirement, pension, and other income;
- exempt all or some retirement, pension, and Social Security income;
- provide credits for retirement and pension income; or
- tax all retirement and pension income.
What States Do Not Tax Retirement Income?
7 states do not tax individual retirement or other income.
| Alaska | Florida | Nevada |
| South Dakota | Texas | Washington |
| Wyoming |
2 states tax only dividend and interest income.
| New Hampshire | Tennessee |
4 states exempt all or most retirement income.
| Illinois | Hawaii | Mississippi |
| Pennsylvania |
What States Tax Some Retirement Income?
21 states tax some, but not all, retirement or pension income. Many of these states limit the exemption amounts based on federal adjusted gross income (AGI) thresholds.
| Alabama | Arkansas | Colorado |
| Connecticut | Delaware | Georgia |
| Iowa | Kentucky | Louisiana |
| Maine | Maryland | Michigan |
| Missouri | Montana | New Jersey |
| New York | Oklahoma | Rhode Island |
| South Carolina | Virginia | Wisconsin |
3 states provide a credit for retirement or pension income.
| Ohio | Oregon | Utah |
What States Tax All or Most Private Retirement Income?
13 states and the District of Columbia tax all or most private retirement or pension income.
| Arizona | California | Idaho |
| Indiana | Kansas | Massachusetts |
| Minnesota | Nebraska | New Mexico |
| North Carolina | North Dakota | Vermont |
| West Virginia |
What States Tax Military Retirement Income?
5 states and the District of Columbia tax all or most military retirement income.
| California | New Mexico | Utah |
| Vermont | Virginia |
Vermont’s governor proposed in his annual budget address to eliminate the tax on military pensions.
14 states tax some, but not all, military retirement income.
| Arizona | Colorado | Delaware |
| Georgia | Idaho | Indiana |
| Kentucky | Maryland | Nebraska |
| North Carolina | Oklahoma | Oregon |
| Rhode Island | South Carolina |
Nebraska is increasing its military retirement income exclusion for tax years after 2021.
21 states exempt all military retirement income from taxation.
| Alabama | Arkansas | Connecticut |
| Hawaii | Illinois | Iowa |
| Kansas | Louisiana | Maine |
| Massachusetts | Michigan | Minnesota |
| Mississippi | Missouri | New Jersey |
| New York | North Dakota | Ohio |
| Pennsylvania | West Virginia | Wisconsin |
What States Tax Social Security Income?
13 states tax some or all Social Security income. Most of these states exempt a part of this income based on AGI thresholds.
| Colorado | Connecticut | Kansas |
| Minnesota | Missouri | Montana |
| Nebraska | New Mexico | North Dakota |
| Rhode Island | Utah | Vermont |
| West Virginia |
The Utah governor’s 2022 budget includes a proposal to create a Social Security tax credit for low and middle income seniors.
By Tim Bjur, J.D.
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