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Partially taxed
Not taxed
Fully taxed

States that Don't Tax Pensions 2024

States that Don't Tax Pensions 2024

Many hardworking citizens look forward to when they get to retire. After nearly a lifetime of work, many Americans get to finally cash in on their retirement plan, like a pension plan.

A pension plan is a type of retirement plan that is made up of contributions from the employer. In some cases, the employee may also contribute to the plan, and the employer can make these funds up to a set limit of a certain percentage.

A pension plan assures a person that they will have an income following retirement. Unfortunately, though, in many states, pension funds can be taxed just like ordinary income.

Laws vary from state to state regarding how pensions are taxed. In some cases, at least a portion is taxed based on the amount of money in the plan and the retiree's age. However, in other states, pensions aren't taxed at all. Let's take a look at the states that don't tax pensions.

  • Alabama: This state doesn't tax pension income from defined benefit retirement plans. This applies to both public and private pensions
  • Alaska: Because Alaska doesn't have an income tax, you won't pay taxes on your pension or other income.
  • Florida: Like Alaska, Florida doesn't have an income tax, so your pension will not be taxed.
  • Hawaii: Public and private pensions aren't taxed in Hawaii, with one exception. Any portion that you contributed will be taxed.
  • Illinois: Private pensions from qualified employee benefit plans are exempt from taxation in Illinois.
  • Iowa: Neither public nor private pensions are taxed in Iowa
  • Louisiana: While public pensions are not taxed, private pensions are partially taxed.
  • Massachusetts: Public pensions are not taxed, but private pensions are fully taxed.
  • Mississippi: Pensions used after the age of 59.5 are not taxed in Mississippi.
  • Nevada: No income tax in Nevada means that your pension will not be taxed after retirement.
  • New Hampshire: New Hampshire is another state with no income taxes, so there is no tax on pension income. There is, however, taxes on interest and dividends.
  • New York: like Louisiana, public pensions are not taxed, but private pensions will be partially taxed.
  • Pennsylvania: The only time pensions are taxed in this state is when you retire early.
  • South Dakota: There are no income taxes in the state of South Dakota, so pensions are not taxed.
  • Tennessee: Taxes are only paid on interest and dividends in this state, not on pensions.
  • Texas: No personal income tax means that Texans can hold onto their pension funds.
  • Washington: Washington is another state without an income tax.
  • Wisconsin: Wisconsin is another state that does not tax public pensions but fully taxes private pensions.
  • Wyoming: Like many other states on this list, Wyoming does not have an income tax.

States that Don't Tax Pensions 2024

State tax policies can change with little notice. Always consult local tax experts for the latest information.

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Public Pensions
Private Pensions
AlabamaNot taxedNot taxed
AlaskaNot taxedNot taxed
ArizonaPartially taxedPartially taxed
ArkansasPartially taxedPartially taxed
CaliforniaPartially taxedPartially taxed
ColoradoPartially taxedPartially taxed
ConnecticutPartially taxedPartially taxed
DelawarePartially taxedPartially taxed
FloridaNot taxedNot taxed
GeorgiaPartially taxedPartially taxed
HawaiiNot taxedNot taxed
IdahoPartially taxedPartially taxed
IllinoisNot taxedNot taxed
IndianaFully taxedFully taxed
IowaNot taxedNot taxed
KansasFully taxedFully taxed
KentuckyPartially taxedPartially taxed
LouisianaNot taxedPartially taxed
MainePartially taxedPartially taxed
MarylandPartially taxedFully taxed
MassachusettsNot taxedFully taxed
MichiganPartially taxedPartially taxed
MinnesotaFully taxedFully taxed
MississippiNot taxedNot taxed
MissouriPartially taxedFully taxed
MontanaFully taxedFully taxed
NebraskaFully taxedFully taxed
NevadaNot taxedNot taxed
New HampshireNot taxedNot taxed
New JerseyPartially taxedPartially taxed
New MexicoPartially taxedPartially taxed
New YorkNot taxedPartially taxed
North CarolinaFully taxedFully taxed
North DakotaPartially taxedPartially taxed
OhioPartially taxedPartially taxed
OklahomaPartially taxedPartially taxed
OregonPartially taxedPartially taxed
PennsylvaniaNot taxedNot taxed
Rhode IslandFully taxedFully taxed
South CarolinaPartially taxedPartially taxed
South DakotaNot taxedNot taxed
TennesseeNot taxedNot taxed
TexasNot taxedNot taxed
UtahPartially taxedPartially taxed
VermontFully taxedFully taxed
VirginiaPartially taxedPartially taxed
WashingtonNot taxedNot taxed
West VirginiaPartially taxedPartially taxed
WisconsinNot taxedFully taxed
WyomingNot taxedNot taxed
showing: 50 rows