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How does your state tax retirement income? A comprehensive list for 2024

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While most states don’t levy state income taxes on your Social Security benefits, the opposite is true for other retirement income, like your pensions or retirement distributions. So, whether you’re planning to move closer to family in your retirement or trying to pick a home base for your post-9-to-5 adventures, understanding how your new home state might tax your income can help you budget and determine the best community for you.

Alabama

Retirees don’t pay state income tax on their Social Security benefits or pensions in Alabama. But your 401(k) and IRA withdrawals are fully taxable at the state’s 5% income tax rate.

⭐ Quick facts: Alabama

Alaska

Alaska doesn’t have a state income tax, which means no additional taxes on your retirement income, regardless of how you invested.

⭐ Quick facts: Alaska

Arizona

Arizona levies a flat 2.5% tax on all income, including retirement income that’s taxable by the federal government. The only exceptions are for retired military members and their spouses, who are exempt from paying taxes on any annuities, benefits, pensions and retainer pay. Beneficiaries of the Arizona State Retirement System (ASRS) must pay taxes on all pension distributions over $2,500.

⭐ Quick facts: Arizona

Arkansas

Residents of Arkansas are subject to the state’s graduated income tax rate of 2% to 4.4%, but there are quite a few exemptions. Military pensions are exempt from state income tax, as is the first $6,000 of your employer-paid pension disbursement — though you can’t take both exemptions together. If you are ages 59 1/2 or older, you can exempt $6,000 from your IRA withdrawals

⭐ Quick facts: Arkansas

California

California has one of the highest state income tax rates in the U.S., with nine tax brackets that range from 1% to 14.4% in 2024 and an additional 1.1% payroll tax for those with income of $1 million or more. Residents can exempt their Social Security benefits but must pay state tax on any retirement income considered taxable by the federal government. The state provides a tax credit of up to $1,748 for seniors ages 65 who qualify for head of household or whose income is less than $92,719.

⭐ Quick facts: California

Colorado

Colorado recently reduced its state income tax to 4.25% from 4.4% starting with the 2024 tax year, which applies to all of your taxable retirement income, including Social Security benefits. But if you turn 55 at any time during the tax year, you can subtract up to $20,000 from your total taxable retirement income. At age 65, you can subtract up to $24,000 from your retirement income and are exempt from paying tax on your Social Security benefits.

⭐ Quick facts: Colorado

Connecticut

After a 2024 tax cut, Connecticut’s state income tax rate now ranges from 2% to 6.99%, depending on your income bracket. If your adjusted gross income is less than $75,000 as a single filer or $100,000 filing jointly, you can exempt 100% of your Social Security benefits and all other retirement income. But the legislation included additional exemptions for singles who make between $75,000 and $100,000 and married couples filing jointly who make between $100,000 and $150,000.

Connecticut is also phasing out its income tax on non–Roth IRA account distributions for those who make above the exempt thresholds. Starting in 2024, 50% of the income is exempt, higher than the 25% exemption in 2023. In tax year 2025, 75% will be exempt, and IRA income will be 100% exempt from 2026 onward.

⭐ Quick facts: Connecticut

Delaware

Delaware residents with a taxable income of $2,000 to $60,000 pay between 2.2% and 5.55% in state income taxes. Those with an income of $60,000 or more are subject to 6.6% in state income tax. While you can exempt only $2,000 of your retirement income before age 60, older seniors can subtract $12,500 from their pension and other eligible retirement income.

⭐ Quick facts: Delaware

Florida

This state’s large retiree population may be partially due to Florida’s lack of state personal income taxes. You won’t pay any state taxes on your retirement income in Florida, regardless of whether it’s from a pension plan or investment withdrawal.

⭐ Quick facts: Florida

Georgia

Georgia imposes a 5.39% flat state income tax for 2024, with planned reductions of 0.10% every year for the next four years, until the rate reaches 4.99% by 2028. The state doesn’t tax Social Security benefits and offers large exclusions on all other retirement income. Starting at ages 62, seniors can exclude $35,000 of their taxable retirement income. At 65, that exclusion jumps up to $65,000.

⭐ Quick facts: Georgia

Hawaii

Retirees don’t pay state tax on any income they draw from public or private pensions in Hawaii — which is good news, as the state has one of the higher state income tax rates in the U.S., capping at 11%. Unfortunately, all other retirement income is subject to the tax.

But a bill passed in June 2024 cuts taxes over the next eight years by increasing the state’s standard deductions in even years, and decreasing rates and eliminating lower tax brackets in odd years. For the 2024 tax year, Hawaii’s standard deduction doubles to $4,400 for single filers and $8,800 for married couples filing jointly.

⭐ Quick facts: Hawaii

Idaho

For 2024, Idaho has moved to a flat state income tax of 5.695% for all residents with taxable income over $2,500 for single filers and $5,000 for joint filers. That includes retirement income, which is also taxed at that rate, with a few exemptions available for military and government pensions.

⭐ Quick facts: Idaho

Illinois

Illinois has a 4.95% flat state income tax. But the state doesn’t tax retirement income. You do have to pay taxes on any early distributions, however. And if you used the 10-year averaging method on your lump sum retirement distributions, you must include that income for state taxes.

⭐ Quick facts: Illinois

Indiana

Indiana residents get a tax cut in 2024, dropping the state income flat tax down to 3.05%. And that tax applies to all retirement income outside Social Security benefits, which are exempt. The state offers a $1,000 tax break to residents who are 65 or older and a $500 exemption if their AGI is less than $20,000 for single filers and $40,000 for joint filers.

⭐ Quick facts: Indiana

Iowa

Taxes are coming down for Iowa residents, with rates between 4.4% and 5.7% in 2024, depending on your income. The top rate drops to 4.82% in 2025 and drops further to a single flat tax of 3.9% in 2026. But seniors ages 55 and older are exempt from paying state income tax on their retirement income.

⭐ Quick facts: Iowa

Kansas

Starting in 2024, Kansas no longer taxes Social Security benefits. But all other retirement income is taxable at the state’s progressive rates between 3.1% and 5.7%, depending on your income. Only government and military pensions are exempt.

⭐ Quick facts: Kansas

Kentucky

Kentucky’s flat state income tax has been reduced to 4% for 2024. The state does tax retirement income, but allows seniors to exclude $41,110 of their distributions and other income from their AGI.

⭐ Quick facts: Kentucky

Louisiana

Louisiana residents must pay state income tax on their retirement, but seniors ages 65 or older can subtract $6,000 from their AGI. Both spouses can take this exclusion if they both earned retirement income within the tax year, even if they file jointly. Louisiana’s state income tax rate ranges from 1.85% to 4.25%, depending on income.

⭐ Quick facts: Louisiana

Maine

Maine’s graduated state income tax rate, which ranges from 5.8% to 7.15%, applies to all retirement income. The state offers a $30,000 pension income deduction that applies to most forms of retirement income, but retirees must subtract their exempt Social Security benefits from that deduction before they can take it. For example, If you make $24,000 in Social Security income, you can only take a $6,000 deduction from the rest of your retirement income.

⭐ Quick facts: Maine

Maryland

Maryland taxes all retirement income with a tax rate ranging from 2% to 5.75%. Residents ages 65 and older are eligible to add $1,000 to the $3,200 personal exemption allowed by the state and to take the pension exclusion, which rose to $39,500 for 2024. The exclusion applies to pensions, annuities and 401(k) plans, but doesn’t apply to IRAs or some other retirement income accounts.

⭐ Quick facts: Maryland

Massachusetts

Massachusetts taxes most retirement income using its 5% state income tax. Seniors may be exempt from paying state income tax if they are a single filer making $8,000 or less, a head of household making less than $14,400 plus $1,000 per dependent or filing jointly making less than $16,400.

Residents making more than $1,053,750 in a year must also pay a 4% surtax. And retirees ages 65 or older can take a $700 exemption.

⭐ Quick facts: Massachusetts

Michigan

Michigan’s flat state income tax rate rose for 2024 to 4.25%, and the law surrounding the state’s pension deduction also changed, as part of a phaseout of the state’s three-tier retirement income tax system.

In 2024, the maximum deduction against retirement income is $64,040 for single filers and $128,080 for those filing jointly. But only those who are 79 or older (born before 1945) can claim the full deduction. Those born after 1945 (age 78) through 1962 (age 62) can claim 50% of the deduction.

In 2025, seniors ages 79 (born after 1945) to 59 (before 1967) can claim 75% of the deduction, and by 2026, all retirees can take the maximum deduction on their retirement income.

⭐ Quick facts: Michigan

Minnesota

Minnesota taxes all retirement income using its state income tax rates between 5.35% and 9.85%, depending on your income. The state offers a deduction for seniors ages 65 and older, but to be eligible, you must have an AGI of less than $33,700 for single filers and $42,000 for joint filers.

⭐ Quick facts: Minnesota

Mississippi

Only early withdrawals from retirement accounts are taxable in Mississippi. All other retirement income is exempt from the state’s 4.7% flat state income tax rate. That rate is slated to fall to 4.4% in 2025 and to 4% in 2026.

⭐ Quick facts: Mississippi

Missouri

Missouri taxes private retirement income at rates between 2% and 4.7%, but allows for deductions of $32,000 for married joint filers, $25,000 for single filers and $16,000 for filers who are married filing separately. Public pensioners can exempt some of their pension income, up to the maximum Social Security benefit amount, which is $46,381 in 2024. But the exemption amount is reduced by the amount of Social Security income exempt.

⭐ Quick facts: Missouri

Montana

Montana has two income-based tax brackets with rates of 4.7% and 5.9%. Both retirement and Social Security income are taxable in the state, and most of the states retirement deductions were repealed for tax year 2024. Residents ages 65 and older can subtract $5,500 from their taxable income.

⭐ Quick facts: Montana

Nebraska

While Social Security benefits are no longer taxable in Nebraska in 2024, the state still taxes all other retirement income with a top income tax rate of 5.84%. The good news is that taxes are being reduced over the next three years to 3.99% in 2027.

⭐ Quick facts: Nebraska

Nevada

Nevada has no state income tax, which means you don’t need to worry about paying extra taxes on your retirement income.

⭐ Quick facts: Nevada

New Hampshire

New Hampshire doesn’t have a state income tax, which means your Social Security benefits and pensions aren’t subject to state tax. But if you make more than $2,400 per year (or $4,800 per year as a married couple filing jointly) in interest and dividends, you’ll be levied a 3% state tax on that income in 2024. Retirees ages 65 and older can take a $1,200 exemption to offset some of the tax.

The interest and dividends tax is being phased out, which means the tax falls to 2% in 2025 and 1% in 2026 — and will be phased out completely in 2027.

⭐ Quick facts: New Hampshire

New Jersey

New Jersey has a graduated state income tax rate ranging from 1.4% to 10.75%. The state taxes retirement income but offers large deductions to seniors ages 62 and older whose adjusted gross income is less than $150,000.

For those whose AGI is $100,000 or less, joint filers can take a $100,000 deduction, married filing separately can take $50,000 and single filers can take $75,000. For those with an AGI between $100,001 and $150,000, deductions range between 12.5% and 50% of their taxable retirement income.

⭐ Quick facts: New Jersey

New Mexico

New Mexico taxes retirement income using state income tax rates, which range from 1.7% to 5.9% in 2024. Residents ages 65 and older can claim an $8,000 exemption to offset their tax burdens. Residents who reach age 100 or older are exempt from state income tax.

⭐ Quick facts: New Mexico

New York

Residents of New York pay state income tax on their retirement income ranging from 4% to 10.9%. But retirees that turn 59 1/2 during the tax year can qualify to exclude up to $20,000 of their retirement income from their adjusted gross income.

⭐ Quick facts: New York

North Carolina

Retirement income is subject to North Carolina’s 4.5% state income tax rate in 2024. The state doesn’t offer any deductions to its seniors, but the flat tax is expected to reduce every year until it reaches 3.99% in 2027.

⭐ Quick facts: North Carolina

North Dakota

Most retirement income is subject to state income tax in North Carolina, but residents with a taxable income of $47,150 or less are exempt. If your taxable income is between $47,151 and $238,200, your tax rate is 1.95%. Incomes above that threshold are subject to a 2.5% tax in 2024.

⭐ Quick facts: North Dakota

Ohio

The 2024 tax rates haven’t been published on its taxation website yet, but Ohio’s 2024–2025 budget removed a state income tax bracket and reduced the top rate, leaving only two. Those with AGIs of 26,051 to $100,000 pay 2.75% in tax, and those who make more than $100,000 in taxable income pay 3.5%.

Ohio taxes most retirement income, offering only two credits: a $50 annual senior citizen credit for residents age 65 and older, or a one-time lump sum distribution credit of up to $200 for those who chose a lump sum distribution from a retirement pension or account. If you choose to take the lump sum credit, you can no longer take the senior citizen credit from that tax year forward.

⭐ Quick facts: Ohio

Oklahoma

Oklahoma’s graduated state income tax rate, ranging from 0.25% to 4.75%, applies to retirement income. But residents can subtract up to $10,000 of their taxable retirement income. The state doesn’t tax Social Security.

⭐ Quick facts: Oklahoma

Oregon

Oregon taxes most retirement income at rates ranging from 4.75% to 9.9%. The only exceptions are Social Security benefits, federal and railroad pensions and previously taxed retirement income, if you paid the tax in another state. If you make less than $30,000 filing jointly or $15,000 as a single filer, you may be able to take a 9% retirement income credit, depending on how much of your income is from Social Security and what types of retirement accounts you use.

⭐ Quick facts: Oregon

Pennsylvania

Seniors aren’t required to pay any Pennsylvania state income tax on their retirement income. Pensions, 401(k) and IRA distributions are all exempt, as are Social Security benefits. The only exception is income generated from an annuity that isn’t part of an employer’s retirement plan. Pennsylvania doesn’t consider that retirement income, and charges state income tax on the feral taxable part of the annuity.

⭐ Quick facts: Pennsylvania

Rhode Island

Rhode Island taxes all retirement income, including Social Security, with three state income tax brackets ranging from 3.75% to 5.99%. But seniors with AGIs below the state’s income limits can exempt their Social Security benefits and subtract up to $20,000 of their taxable retirement income, $40,000 for a qualifying married couple. IRA distributions are always fully taxable.

The state hasn’t yet updated the income limits for 2024, but 2023 limits were $126,250 for married couples filing jointly, $101,000 for single or head of household taxpayers and $101,025 for married couples filing separately.

⭐ Quick facts: Rhode Island

South Carolina

Most retirement income is taxable in South Carolina using the state’s state income tax rates of 3.0% to 6.2% in 2024. But retirees can take a $3,000 retirement income deduction through age 64, and a $10,000 deduction for seniors ages 65 and older. South Carolina also offers a $15,000 income tax deduction to all taxpayers age 65 and older — but you can’t take both the retirement income and income tax deductions. Whatever amount you deduct from your retirement income is subtracted from your income tax deduction.

⭐ Quick facts: South Carolina

South Dakota

Retirees in South Dakota don’t have to worry about taxes on their retirement income, because the state has no state income taxes.

⭐ Quick facts: South Dakota

Tennessee

The state of Tennessee has never had a state income tax. And as of 2021, the state no longer taxes interest and dividends, leaving your retirement income free of state tax.

⭐ Quick facts: Tennessee

Texas

Texan retirees are constitutionally protected from paying state taxes on their retirement income. The state constitution makes state income taxes illegal.

⭐ Quick facts: Texas

Utah

Utah has a flat state income tax of 4.55%, which applies to all retirement income, including Social Security benefits. Seniors can get a tax credit against their taxable Social Security or can choose to take a retirement credit starting at age 72.

⭐ Quick facts: Utah

Vermont

Vermont has a graduated state income tax rate of 3.35% to 8.75%, depending on your income. Most retirement income is taxable in the state, but you can exclude up to $10,000 from any retirement income that is not subject to Social Security withholding if you meet the income guidelines — AGI less than $75,000 for joint filers, and $60,000 for all other filers. At age 65, seniors can add $1,000 to their standard deduction.

⭐ Quick facts: Vermont

Virginia

Senior residents of Virginia pay between 3% and 5.5% in state income tax on most of their retirement income. But starting at age 65, seniors can take a $12,000 deduction, which is reduced, dollar for dollar, by any amount of taxable income that exceeds $50,000 for singles and $75,000 for married couples, whether you file jointly or separately. Seniors age 85 and older get a $12,000 deduction, regardless of income.

⭐ Quick facts: Virginia

Washington

Washington State has no state income tax, so your retirement income is safe. But if you make more than $250,000 per year, you’ll be subject to the state’s relatively high capital gains tax. The state levies a 7% tax on long-term adjusted capital gains allocated to Washington.

⭐ Quick facts: Washington

Washington D.C.

The U.S. capital city taxes most retirement income with tax brackets ranging from 4% to 10.5%. Washington D.C. doesn’t offer any tax breaks for private pensions or retirement account distributions, but seniors age 65 or older can add $1,300 to their standard deduction.

⭐ Quick facts: Washington D.C.

West Virginia

A West Virginia law reduces personal income tax whenever the state’s revenue exceeds the rate of inflation. That means that state income tax rates were reduced across 2024 brackets to a range of 2.37% to 5.12%. These rates apply to most retirement income, but seniors ages 65 and older can deduct $8,000 from their taxable income, regardless of the source.

⭐ Quick facts: West Virginia

Wisconsin

Residents of Wisconsin pay between 3.50% and 7.65% state income tax on their retirement benefits. If your AGI is less than $30,000 for joint filers or $15,000 for all other filers, you can deduct $5,000 from your retirement income. Seniors age 65 and older can take an additional $700 standard deduction, plus another $250 personal deduction.

⭐ Quick facts: Wisconsin

Wyoming

Retirees in Wyoming are free from state income tax, which applies to their retirement income as well.

⭐ Quick facts: Wyoming

Quick reference: How states tax retirement income

Whether you’re considering moving to another state or curious about your own, here’s a convenient list of states grouped by how they tax income, pensions, retirement withdrawals and Social Security.

States with no personal income tax

States with personal income tax that don’t tax pensions

States with personal income tax that don’t tax retirement income

States that tax Social Security

How retirement income is taxed by the IRS

Your federal taxable income — also known as the adjustable gross income (AGI) — is the basis for all state income tax. Understanding how the IRS taxes your retirement income can ensure you’re reporting your AGI correctly and keep you from over or under paying the taxes you owe.

Federal taxes on Social Security

The IRS uses a simple formula to determine whether your Social Security benefits are taxed or not: Add 50% of your Social Security benefits to any other income you earned throughout the year.

That’s considered your combined income for tax purposes. How much of your benefits are subject to tax depends on that combined income and your filing status.

If you’d rather pay your taxes through the year instead of all at once at tax time, you can elect to have the IRS withhold taxes from your monthly payments.

Federal taxes on other retirement income

Most of your retirement income is subject to normal income tax rates within your tax bracket, including:

The following income streams may be exempt from federal income taxes:

Income from selling off stocks and bonds, qualified dividends and other investments you’ve held for over a year may be subject to capital gains taxes.

How to reduce your tax burden

General advice isn’t always going to help reduce your tax burden, because each person’s financial situation is unique. That’s why it’s useful to consult a tax professional to make sure you’re only paying the taxes you owe.

The following tips can help you get started:

  1. Lower your tax bracket. Keeping your annual income at a lower level reduces the amount of taxes you owe. Whether that means taking disbursements at a younger age to ensure smaller disbursements when you’re older or paying off bills to decrease your income requirements, a lower tax bracket will lessen your annual taxes.
  2. Convert your pre-tax investments before retirement. If you can afford to do it, converting your pre-tax IRAs to Roth IRAs while you’re still gainfully employed can reduce your tax burden on later disbursements from your accounts at both the state and federal level.
  3. Talk with a tax professional. Finding a good tax professional who has experience with pensions and retirement accounts is the best way to make sure you’re not overpaying your taxes. If you can’t afford to pay someone, the IRS offers free basic tax return prep through its Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. VITA is available for those who make up to $64,000 per year, and the TCE program is for seniors ages 60 and older.

Dig deeper: Tax breaks after 50 you might not know about

FAQs: Your retirement savings and taxation

Learn more about your retirement funds, your tax burden and tax breaks for seniors.

At what age do I stop paying taxes on my Social Security benefits or retirement income?

While it’s a persistent myth, there is no age limit on federal taxes to retirement income or Social Security. The determination of whether your retirement is taxable is based on income level, not age. If your total income is more than $25,000 as a single filer or $32,000 as a joint filer, you must pay taxes on your Social Security, regardless of your age.

Is low tax burden the best way to decide where to retire?

Not necessarily. For example, Alaska is continuously ranked as the lowest tax burden in the US, but the cost of living is significantly higher, especially in housing and utility costs. You may also want to consider family support, access to medical care and quality of life, depending on your activities and interests.

Are there other tax breaks I can claim as a retiree?

In addition to retirement income tax exemptions, some states offer tax credits or deductions for property taxes and utility expenses, or may even increase deductions for any small businesses you still own after age 65. It’s worth searching state government websites to see if there’s a tax guide for seniors in your state. And read our guide to tax breaks after 50 you might not know about.

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