How states tax federal pensions (CSRS and FERS)

A federal civil service annuity, whether from the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), is taxable on your federal return in the usual way. What your state does with it is a different question, and the answers range from fully exempt to fully taxed, sometimes with rules written specifically for federal retirees. If you are a federal retiree deciding where to live, or simply filing your state return, the details matter.

This guide collects what state revenue departments say about federal pensions, quoting the documents listed at the end. States that do not mention federal pensions specifically treat them under their general pension rules, which are on each state's own page.

No state income tax at all

In Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming there is no state tax on retirement income, so a federal annuity is not taxed by the state.

States that exempt federal civil service pensions

New York: pensions from a federal government pension plan can be subtracted in full, regardless of your age or how the payments are made. Other pensions get only a $20,000 exclusion from 59½.
Kansas: the booklet lists Federal Civil Service Retirement or Disability Fund payments and other federal retirement benefits, including the Thrift Savings Plan, among the retirement income Kansas exempts.
Alabama: "United States Government Retirement Fund benefits" are on the state's list of income exempt from Alabama income tax.
Hawaii: Hawaii does not tax distributions from a public retirement system, and names the federal civil service annuity as an example, unless the employee made voluntary contributions under an elective right.
Massachusetts: income from contributory pensions of the U.S. government is excluded from Massachusetts gross income.

States with rules that depend on CSRS, FERS or dates

Oklahoma: each person may exclude 100% of CSRS benefits paid in lieu of Social Security. Oklahoma says FERS benefits do not qualify for this, except the CSRS part of a combined benefit and the FERS annuity supplement. Other retirement benefits can use the general $10,000 exclusion.
North Carolina: under the Bailey decision, benefits from FERS and CSRS, among other plans, are excluded if the retiree had five or more years of creditable service as of August 12, 1989.
Oregon: a U.S. government pension for service before October 1991 may be partly or fully subtracted.
Vermont: taxpayers below the income thresholds can exclude the first $10,000 of CSRS retirement income.
Minnesota: any federal government plan based on service for which you did not earn Social Security benefits may qualify for Minnesota's public pension subtraction, within its income limits.

Notice the pattern: some states tie their rule to Social Security. Oklahoma's exclusion is for CSRS benefits paid in lieu of Social Security, and Minnesota's subtraction is for federal service on which you did not earn Social Security benefits.

Partial breaks

Indiana: a deduction of up to $16,000 of a civil service annuity at 62 or older, reduced by any Social Security and tier 1 railroad benefits you receive.
Arizona: a subtraction of up to $2,500 for pension income from U.S. government service.
District of Columbia: survivors 62 or older can subtract D.C. and federal government survivor benefits; the annuity itself is otherwise taxed.

General retirement exclusions also apply

Many states have no federal-specific rule but a broad retirement exclusion that a federal annuity can use. Examples: Georgia's up to $65,000 at 65 or older, Kentucky's $31,110, Maryland's up to $41,200 at 65, Delaware's $12,500 at 60, South Carolina's $10,000 at 65, Colorado's $24,000 at 65, and the Iowa, Illinois, Mississippi and Pennsylvania rules that leave most retirement income untaxed. The retirement income table lists every state.

Here is the general rule in each state that taxes pensions but has a retirement exclusion or deduction, as summarized on each state's page. Where a federal-specific rule above also applies, the two can interact, so read the state's own page before counting on either:

Alabama: Alabama exempts payments from qualifying defined benefit pension plans, and people 65 or older can exclude up to $6,000 of other taxable retirement income, such as IRA or 401(k) withdrawals.
Arkansas: Arkansas lets retirees exclude the first $6,000 of pension income from an employer-sponsored plan, or of traditional IRA withdrawals after 59½. Each spouse with qualifying income gets a separate $6,000.
Colorado: From age 55, Colorado lets you subtract pension and annuity income up to $20,000 a year, or $24,000 at 65 or older. Military retirement and railroad benefits have their own subtractions.
Connecticut: Connecticut has a subtraction for pension, annuity and traditional IRA income for filers below $100,000 of federal AGI ($150,000 for joint filers). Military retirement pay and railroad retirement benefits are fully exempt.
Delaware: Delaware taxes pensions, but people 60 or older can exclude up to $12,500 of pension and eligible retirement income each, and those under 60 up to $2,000 of pension income.
Georgia: Georgia's retirement income exclusion is up to $35,000 at ages 62 to 64 (or younger and permanently disabled) and up to $65,000 at 65 or older, per person. It covers pensions, annuities, interest, dividends and other retirement income.
Hawaii: Hawaii does not tax qualifying distributions from employer-funded pension plans, including government and military pensions. Plans you fund yourself, such as IRAs and 401(k) contributions, are treated as your own investments and taxed.
Kansas: Kansas exempts KPERS and the other public retirement plans listed in its booklet, plus federal civil service and military retirement, including the Thrift Savings Plan. We found no exclusion for private pensions or IRAs in the booklet.
Kentucky: Kentucky allows a pension exclusion of $31,110.
Louisiana: From 2025, Louisiana lets people 65 or older exclude up to $12,000 of annual retirement income, adjusted each year for inflation. Benefits from the retirement systems on its list are also excluded.
Maine: For 2025 Maine lets each person deduct up to $48,216 of eligible pension income, but that cap is reduced by any Social Security and railroad retirement benefits received. Military retirement pay has its own deduction.
Maryland: If you are 65 or older or totally disabled, Maryland lets you subtract taxable pension income up to $41,200. IRAs do not qualify for it.
Massachusetts: Massachusetts taxes most private pensions and annuities, but many government pensions are exempt. Traditional IRA withdrawals are taxable.
Michigan: and growing. Michigan is phasing back in its retirement and pension subtraction: up to 75% of the limit for 2025 and up to 100% from 2026, based on private pension limits.
Missouri: Missouri has a public pension deduction of up to $47,633 per person for 2025 and a private pension deduction of up to $6,000 with income limits.
New Jersey: If you are 62 or older (or disabled) and your total income is $100,000 or less, New Jersey lets you exclude taxable pension, annuity and IRA withdrawals up to $100,000 (joint), $75,000 (single) or $50,000 (married filing separately). The exclusion shrinks between $100,001 and $150,000 and ends above $150,000.
New York: Pensions from New York State, its local governments and the federal government are fully subtracted at any age. Other pensions, annuities and IRA withdrawals qualify for an exclusion of up to $20,000 per person from age 59½.
North Carolina: Under the Bailey decision, North Carolina excludes benefits from certain state, local and federal defined benefit plans for retirees who had five or more years of service as of August 12, 1989. We found no general exclusion for other pensions in NCDOR's materials.
Oklahoma: Oklahoma lets each person exclude up to $10,000 of retirement benefits from the sources the Tax Commission lists, and 100% of federal civil service (CSRS) benefits paid in lieu of Social Security.
Rhode Island: For 2025 Rhode Island exempts up to $50,000 of qualifying taxable pension and annuity income per person, for people at full retirement age with income under its limit.
South Carolina: South Carolina taxes pension income, but you can deduct up to $3,000 of retirement income a year before 65 and up to $10,000 from 65. All military retirement income is deductible.
Wisconsin: Wisconsin taxes the same pension income that is taxable federally, but from 2025 people 67 or older can subtract up to $24,000 ($48,000 for a couple), and a $5,000 subtraction applies at 65 for lower incomes.

Moving out of the state where you worked

Many federal employees retire somewhere other than where they spent their career. A federal law, section 114 of Title 4 of the U.S. Code, limits a state's ability to tax retirement income paid to people who no longer live there. New York's tax department, for example, explains that income from certain types of pensions received while you are a nonresident is not taxed by New York, lists certain governmental plans among the examples, and points to section 114 for the full definition. In practice, the state you live in is the one whose rules matter for your annuity. The year you move can involve a part-year return in each state, so keep track of the date you changed residence.

CSRS annuitants and Social Security: WEP and GPO are gone

For CSRS retirees, the bigger change of recent years is federal, not state. CSRS employees did not pay Social Security tax on their federal pay, and for decades two rules, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), reduced or eliminated their Social Security benefits. The Social Security Fairness Act, signed January 5, 2025, ended both for benefits payable from January 2024. The Social Security Administration names federal employees covered by CSRS among the workers whose benefits go up.

If you are a CSRS annuitant who never applied for your own Social Security benefit, or for a spouse's or survivor's benefit, because WEP or GPO would have shrunk or erased it, SSA says you may need to file an application now. The law did not change how far back a new application reaches: retroactive benefits for retirement and survivor claims are generally limited to six months before the month you apply. SSA also explains how Medicare premiums that were deducted from a CSRS annuity move to the Social Security payment, with any refund usually included in the back payment.

The Thrift Savings Plan

Kansas is one state whose booklet names the Thrift Savings Plan explicitly as exempt federal retirement income. For other states, check how the state treats retirement plan withdrawals on its page; the documents above do not single the TSP out.

Before you move or file

Find whether your annuity is CSRS, FERS, or both.
Read your state's pension page for a federal-specific rule, then for a general retirement exclusion.
Check age and income limits, which many exclusions have.
Look at Social Security too: the Social Security table covers it.

Military retired pay is a federal pension too, but many states treat it under separate rules that are more generous than the ones for civil service annuities. If you are a military retiree, see which states tax military retirement pay.