States That Don’t Tax Retirement Income: What to Know and How To Plan

Do you know which states don’t tax retirement income? If not, then read on to find out! Many states have a law that states that they do not tax any source of retirement income. This includes income from IRAs, 401ks, pensions, and annuities. So it doesn’t matter how much money you make or where in the United States you live – if your state is one of these states, then your retirement income will be free of taxation.

States That Won’t Tax Your Social Security Income

The following states are exempt from income taxes on Social Security Benefits:

1. Colorado
2. California
3. Connecticut (50% of Benefits)
4. Florida
5. Kansas
6. Minnesota (33% of Benefits)
7. Missouri (Based on Annual Income Amount)
8. Montana
9. Rhode Island (Based on Annual Income Amount)
10. Vermont
11. West Virginia (Starting in 2022)
12. New Jersey

States That Won’t Tax Your Pension Income

The following states are exempt from income taxes on pension income:

1. Alaska
2. Florida
3. Nevada
4. South Dakota
5. Tennessee
6. Texas
7. Washington
8. Wyoming
9. New Hampshire
10. Alabama
11. Illinois
12. Hawaii
13. Mississippi
14. Pennsylvania

States That Won’t Tax Your TSP Income

The following states are exempt from income taxes on Thrift Savings Plan (TSP) Income:

1. Alaska
2. Florida
3. Nevada
4. New Hampshire
5. South Dakota
6. Tennessee
7. Texas
8. Washington
9. Wyoming
10. Illinois
11. Mississippi
12. Pennsylvania

States That Don’t Have State Income Taxes

The following states are exempt from state income taxes.:

1. Alaska
2. Florida
3. Nevada
4. New Hampshire
5. South Dakota
6. Tennessee
7. Texas
8. Washington
9. Wyoming

States That Won’t Tax Your 401(k), IRA, or Pension Distributions

The following states are exempt from income taxes on 401k, IRA, annuity, and pension income:

1. Illinois,
2. Mississippi and
3. Pennsylvania

States That Won’t Tax Your Pension But Taxes 401(k)s and IRAs

The following states are exempt from income taxes on pension income but will be taxed on 401k and IRA income:

• Alabama
• Hawaii

States That Won’t Tax Your Estate or Inheritance

The following states are exempt from estate taxes and inheritance taxes:

1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. California
6. Colorado
7. Delaware
8. Florida
9. Georgia
10. Idaho
11. Indiana
12. Iowa
13. Kansas
14. Kentucky
15. Louisiana
16. Maryland
17. Michigan
18. Mississippi
19. Missouri
20. Montana
21. Nebraska
22. Nevada
23. New Hampshire
24. New Jersey (Estate Tax Only)
25. New Mexico
26. North Carolina
27. North Dakota
28. Ohio
29. Oklahoma
30. Pennsylvania
31. South Carolina
32. South Dakota
33. Tennessee
34. Texas
35. Utah
36. Virginia
37. West Virginia
38. Wisconsin
39. Wyoming

States That Don’t Have Sales Tax

The following states are exempt from state sales taxes:

1. Alaska
2. Delaware
3. Montana
4. New Hampshire
5. Oregon

States That Don’t Tax Military Retirement Income

States that don’t tax military retirement pay include:

• 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

Learn How To Retire Comfortably In Each State

Related Reading

• Best Ways To Leave Money To Heirs
• How Long Will My Money Last?
• How Much Money Do You Need To Retire?

Shawn Plummer

I’m a licensed financial professional. I’ve sold annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you.