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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.
State tax policies can change with little notice. Always consult local tax experts for the latest information.
State | Public Pensions | Private Pensions |
---|---|---|
Alabama | Not taxed | Not taxed |
Alaska | Not taxed | Not taxed |
Arizona | Partially taxed | Partially taxed |
Arkansas | Partially taxed | Partially taxed |
California | Partially taxed | Partially taxed |
Colorado | Partially taxed | Partially taxed |
Connecticut | Partially taxed | Partially taxed |
Delaware | Partially taxed | Partially taxed |
Florida | Not taxed | Not taxed |
Georgia | Partially taxed | Partially taxed |
Hawaii | Not taxed | Not taxed |
Idaho | Partially taxed | Partially taxed |
Illinois | Not taxed | Not taxed |
Indiana | Fully taxed | Fully taxed |
Iowa | Not taxed | Not taxed |
Kansas | Fully taxed | Fully taxed |
Kentucky | Partially taxed | Partially taxed |
Louisiana | Not taxed | Partially taxed |
Maine | Partially taxed | Partially taxed |
Maryland | Partially taxed | Fully taxed |
Massachusetts | Not taxed | Fully taxed |
Michigan | Partially taxed | Partially taxed |
Minnesota | Fully taxed | Fully taxed |
Mississippi | Not taxed | Not taxed |
Missouri | Partially taxed | Fully taxed |
Montana | Fully taxed | Fully taxed |
Nebraska | Fully taxed | Fully taxed |
Nevada | Not taxed | Not taxed |
New Hampshire | Not taxed | Not taxed |
New Jersey | Partially taxed | Partially taxed |
New Mexico | Partially taxed | Partially taxed |
New York | Not taxed | Partially taxed |
North Carolina | Fully taxed | Fully taxed |
North Dakota | Partially taxed | Partially taxed |
Ohio | Partially taxed | Partially taxed |
Oklahoma | Partially taxed | Partially taxed |
Oregon | Partially taxed | Partially taxed |
Pennsylvania | Not taxed | Not taxed |
Rhode Island | Fully taxed | Fully taxed |
South Carolina | Partially taxed | Partially taxed |
South Dakota | Not taxed | Not taxed |
Tennessee | Not taxed | Not taxed |
Texas | Not taxed | Not taxed |
Utah | Partially taxed | Partially taxed |
Vermont | Fully taxed | Fully taxed |
Virginia | Partially taxed | Partially taxed |
Washington | Not taxed | Not taxed |
West Virginia | Partially taxed | Partially taxed |
Wisconsin | Not taxed | Fully taxed |
Wyoming | Not taxed | Not taxed |