Retirement Taxes by State 2024

Retirees continue to pay taxes in retirement. Taxes will be calculated much like how they are before retirement and it is important to estimate the amount one will pay in retirement so that finances can be planned accordingly. If a person is relocating to a different state for retirement, it is important to examine the state taxes on retirement benefits. Some states are friendlier for retirees tax-wise than others, and because retirees have special financial concerns, taxes can be a large factor when deciding where it is best to retire. Special financial concerns for retirees include whether Social Security benefits are taxable at the state level, property taxes, and how retirement account and pension withdrawals are taxed.

There are seven states with no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. New Hampshire imposes income taxes only on dividends and interest while Washington only imposes a tax on capital gains income. These nine states are considered to be “tax-friendly” or “most-tax friendly” for retirees among others.

The ten most tax-friendly states for retirement (in no particular order) are Alaska, Florida, Georgia, Kentucky, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, and Wyoming. Some states allow tax exemption for military personnel or emergency services personnel or allow deductions up to a certain amount. Some states do not offer any retirement income tax benefits. These states are considered to be “not tax-friendly,” “least tax-friendly,” or “mixed.”

The ten least tax-friend states for retirement (in no particular order) are Connecticut, Indiana, Kansas, Maryland, Minnesota, Nebraska, New Mexico, Utah, Vermont, and Wisconsin. In addition to income tax, retirees must also consider sales, property, estate, and inheritance tax rates. Below is a table of each state’s tax-friendliness for retirement categorized by most tax-friendly, tax-friendly, least tax-friendly, not tax-friendly, and mixed.

Retirement Taxes by State 2024

Notes:
- Retirement tax friendliness is measured on a five-point scale from 1 (least friendly) to 5 (most friendly).
- States which are considered retirement tax friendly often have low or no income tax, low or no tax on retirement income, and/or low property and sales taxes.
- States which are considered retirement tax unfriendly often have minimal tax breaks for retirees and retirement income, and/or higher property and sales taxes.
- Detailed per-state tax information may be found through the links in the Additional Details column

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State
Retirement Taxes by State
Additional Details
Link
Arizona5 - Most Friendly
Arizona tax profile
Source
Colorado5 - Most Friendly
Colorado tax profile
Source
Delaware5 - Most Friendly
Delaware tax profile
Source
District of Columbia5 - Most Friendly
District of Columbia tax profile
Source
Hawaii5 - Most Friendly
Hawaii tax profile
Source
Idaho5 - Most Friendly
Idaho tax profile
Source
Nevada5 - Most Friendly
Nevada tax profile
Source
South Carolina5 - Most Friendly
South Carolina tax profile
Source
Tennessee5 - Most Friendly
Tennessee tax profile
Source
Wyoming5 - Most Friendly
Wyoming tax profile
Source
Alabama4 - Tax-Friendly
Alabama tax profile
Source
Arkansas4 - Tax-Friendly
Arkansas tax profile
Source
California4 - Tax-Friendly
California tax profile
Source
Florida4 - Tax-Friendly
Florida tax profile
Source
Georgia4 - Tax-Friendly
Georgia tax profile
Source
Kentucky4 - Tax-Friendly
Kentucky tax profile
Source
Louisiana4 - Tax-Friendly
Louisiana tax profile
Source
Mississippi4 - Tax-Friendly
Mississippi tax profile
Source
Virginia4 - Tax-Friendly
Virginia tax profile
Source
Washington4 - Tax-Friendly
Washington tax profile
Source
Alaska3 - Neutral
Alaska tax profile
Source
Maine3 - Neutral
Maine tax profile
Source
Maryland3 - Neutral
Maryland tax profile
Source
Montana3 - Neutral
Montana tax profile
Source
New Mexico3 - Neutral
New Mexico tax profile
Source
North Carolina3 - Neutral
North Carolina tax profile
Source
North Dakota3 - Neutral
North Dakota tax profile
Source
Oklahoma3 - Neutral
Oklahoma tax profile
Source
Oregon3 - Neutral
Oregon tax profile
Source
Utah3 - Neutral
Utah tax profile
Source
West Virginia3 - Neutral
West Virginia tax profile
Source
Indiana2 - Not Friendly
Indiana tax profile
Source
Massachusetts2 - Not Friendly
Massachusetts tax profile
Source
Michigan2 - Not Friendly
Michigan tax profile
Source
Minnesota2 - Not Friendly
Minnesota tax profile
Source
Missouri2 - Not Friendly
Missouri tax profile
Source
New Hampshire2 - Not Friendly
New Hampshire tax profile
Source
Ohio2 - Not Friendly
Ohio tax profile
Source
Pennsylvania2 - Not Friendly
Pennsylvania tax profile
Source
Rhode Island2 - Not Friendly
Rhode Island tax profile
Source
South Dakota2 - Not Friendly
South Dakota tax profile
Source
Connecticut1 - Least Friendly
Connecticut tax profile
Source
Illinois1 - Least Friendly
Illinois tax profile
Source
Iowa1 - Least Friendly
Iowa tax profile
Source
Kansas1 - Least Friendly
Kansas tax profile
Source
Nebraska1 - Least Friendly
Nebraska tax profile
Source
New Jersey1 - Least Friendly
New Jersey tax profile
Source
New York1 - Least Friendly
New York tax profile
Source
Texas1 - Least Friendly
Texas tax profile
Source
Vermont1 - Least Friendly
Vermont tax profile
Source
Wisconsin1 - Least Friendly
Wisconsin tax profile
Source
showing: 51 rows

Retirement Taxes by State 2024

Sources