States that don't tax retirement income: a state-by-state guide

Where you live in retirement can matter as much as how you invest. Two retirees with the same pension, the same IRA and the same Social Security check can owe very different amounts of state income tax, from nothing at all to several thousand dollars a year. Federal tax is the same everywhere; state tax is not.

This guide sorts all 50 states and Washington, D.C. by how they treat the three main kinds of retirement income: Social Security, pensions, and withdrawals from IRAs and 401(k)s. Each state links to its own page, where we quote that state's revenue department word for word and link to the document. Rules depend on age, income and the kind of plan, so use this as a map, then read your state's page. The state figures in this guide all come from those pages; the sources listed at the end cover the federal rules mentioned here.

The 9 states with no tax on retirement income

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming do not tax wages or retirement income. In New Hampshire's case the tax on interest and dividends was repealed starting in 2025, and Tennessee's ended in 2021. Washington is the one to watch: its Department of Revenue says a new 9.9% tax on adjusted gross income over $1 million begins January 1, 2028.

No income tax does not mean low taxes overall. These states raise money in other ways, such as sales and property taxes, which this guide does not cover.

The 4 income-tax states that leave most retirement income alone

Illinois, Iowa, Mississippi, Pennsylvania have an income tax but do not tax most pension and retirement income, each with its own conditions:

Illinois: Illinois lets you subtract federally taxed retirement income from qualified employee benefit plans, including 401(k) plans, and from IRAs and self-employed retirement plans.
Iowa: From age 55. Since 2023 Iowa excludes retirement income from Iowa taxable income for taxpayers who are 55 or older, disabled, or certain survivors.
Mississippi: Mississippi generally does not tax retirement income, pensions and annuities once the plan's retirement requirements are met. Early distributions can be taxed.
Pennsylvania: Pennsylvania does not tax commonly recognized pension and retirement benefits paid after you are eligible to retire and have retired. Early distributions are taxable.

All of them also do not tax Social Security.

Social Security: most states don't tax it

Only 8 states tax Social Security for some people: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont. Even there, most have income limits or age rules that exempt many retirees; Colorado, for example, lets people 65 or older subtract all of the Social Security taxed on their federal return. West Virginia's exemption reaches 100% for everyone with tax year 2026. Every other income-tax state, and D.C., exempts it. The Social Security table has every state.

The 22 states with a retirement exclusion

Most states fall here: pensions and IRA withdrawals are taxed, but a deduction or exclusion aimed at retirees takes a bite out of the taxable amount. The size varies enormously, from Kentucky's $31,110 pension exclusion and Georgia's up-to-$65,000 retirement exclusion at 65, to smaller amounts like Arkansas's $6,000. Some exclude only government pensions (Kansas, Massachusetts, and North Carolina under its Bailey settlement).

The 16 states that tax retirement income with narrow exceptions

Arizona, California, District of Columbia, Idaho, Indiana, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oregon, Utah, Vermont, Virginia, West Virginia generally tax pensions and IRA withdrawals. Most still have something for retirees, often a military retirement exclusion, a credit or a general deduction for people 65 and older (Montana's $5,500, New Mexico's up-to-$8,000 exemption, West Virginia's $8,000 senior modification, Virginia's age deduction), but nothing aimed broadly at pension income.

Military retirees

Many states treat military retired pay more generously than other pensions. Several state pages note it: Arizona excludes it, Connecticut, Nebraska, Indiana and Iowa exempt it fully, North Dakota has a deduction for it, South Carolina lets retirees deduct all of it, and California allows up to $20,000 for 2025 through 2029. If you are a military retiree, the military retirement table covers all 50 states and D.C.

How to compare two states

List your retirement income by type: Social Security, pension (government or private), IRA and 401(k) withdrawals, and investment income.
On each state's pension and Social Security pages, check which types are exempt, and the age and income limits.
Remember that IRA withdrawals and pensions are often treated differently, and government pensions differently from private ones.
Federal tax does not change with your state: use the federal tax brackets and the taxable Social Security calculator for that part.
Check the dates: several states, including Michigan and Louisiana, are changing their rules year by year.

State tax is only one piece of the cost of living in retirement, but it is one you can look up precisely. Start with the retirement income table.