Updated April 2026
Retirement Income Tax by State (2026)
41 states do not tax Social Security benefits. 9 states have no income tax at all. How states treat pensions, 401(k) withdrawals, military pensions, and IRA distributions varies enormously. Illinois exempts all retirement income despite a 4.95% flat rate on wages. California taxes pension and 401(k) income fully. Here is the complete 2026 scorecard.
41
States that don't tax Social Security
9
States with no income tax at all
~20
States that fully exempt most pensions
6
States with inheritance tax
2026 Retirement Income Scorecard (Selected States)
| State | Social Security | Pension | 401(k)/IRA | Military Pension | Estate Tax | SS Note |
|---|---|---|---|---|---|---|
| Alaska | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Florida | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Nevada | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| New Hampshire | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| South Dakota | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Tennessee | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Texas | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Washington | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Wyoming | Exempt | Exempt | Exempt | Exempt | No | No income tax |
| Illinois | Exempt | Exempt | Exempt | Exempt | Yes | Not taxed |
| Mississippi | Exempt | Exempt | Exempt | Exempt | No | Not taxed |
| Pennsylvania | Exempt | Partial | Partial | Exempt | Yes | Not taxed |
| New York | Exempt | Partial | Partial | Exempt | Yes | Not taxed |
| Georgia | Exempt | Partial | Partial | Exempt | No | Not taxed |
| New Jersey | Partial | Partial | Partial | Exempt | Yes | Exempt below $150K AGI |
| California | Exempt | Taxed | Taxed | Taxed | No | Not taxed |
| Oregon | Taxed | Taxed | Taxed | Partial | Yes | Taxed as ordinary income |
| Minnesota | Partial | Taxed | Taxed | Partial | Yes | Exempt below income threshold |
| Vermont | Partial | Taxed | Taxed | Partial | Yes | Partial exemption |
| Colorado | Partial | Partial | Partial | Partial | No | Exempt for age 65+ |
| Ohio | Exempt | Partial | Partial | Exempt | No | Not taxed |
| Michigan | Exempt | Partial | Partial | Partial | No | Not taxed |
| Massachusetts | Exempt | Partial | Taxed | Exempt | Yes | Not taxed |
| Maryland | Exempt | Partial | Taxed | Exempt | Yes | Not taxed |
| Wisconsin | Exempt | Taxed | Taxed | Exempt | No | Not taxed |
Partial = exemption exists but with income thresholds or age requirements. Confirm your state's specific rules before filing. Source: state DORs, Tax Foundation, AARP. April 2026.
9 States That Tax Social Security
Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont tax Social Security benefits to some degree. Most have income thresholds:
- Colorado: Exempt for age 65+; partial deduction for 55-64
- Connecticut: Exempt below $75K AGI (single)
- Kansas: Exempt below $75K AGI
- Minnesota: Phasing out taxation; exempt below thresholds
- Montana: Taxed as ordinary income (no threshold)
- New Mexico: Exempt below $100K single in 2023+
- Rhode Island: Exempt below income threshold
- Utah: Up to $20K credit can offset SS tax
- Vermont: Exempt below $50K AGI single
Best States for Retirement Income Taxes
For a retiree living primarily on Social Security, pension, and 401(k) income:
- 1. Florida, Nevada, Wyoming, South Dakota, Tennessee: No income tax on any retirement income
- 2. Illinois: No income tax on pensions, 401(k), IRA, or SS despite 4.95% wage rate
- 3. Mississippi: No income tax on qualified retirement distributions
- 4. Georgia: Up to $65,000 exclusion per person for age 65+
- 5. New York: $20K exclusion for 59.5+, SS exempt, government pensions exempt
Frequently Asked Questions
Which states do not tax Social Security income?
41 states do not tax Social Security benefits. The 9 states that do tax Social Security are Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Most of these 9 states have income thresholds above which the exemption phases out, so many middle-income retirees may still have Social Security fully exempt even in these states.
Which states do not tax pension income?
Many states fully exempt certain pension income. States that exempt most or all pension income include Alabama, Alaska, Florida, Hawaii (government pensions), Illinois, Louisiana (some government pensions), Mississippi (qualified plans), Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Illinois is notable for exempting all pension income including private pensions, 401(k) distributions, and IRAs.
Which states tax 401(k) and IRA withdrawals?
Most states that have income tax also tax 401(k) and IRA withdrawals as ordinary income. States that fully exempt retirement account distributions include Illinois, Mississippi (qualified distributions), and the 9 no-income-tax states. States with partial exemptions include Georgia (up to $65,000 for age 65+), New York ($20,000 exclusion for age 59.5+), and several others.
Which states exempt military pensions from income tax?
Most states exempt military pensions. States that fully exempt military retired pay include Alabama, Alaska, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming. California does not exempt military pensions and taxes them as ordinary income.
What are the best states for retirement income taxes?
The best states for retirement income tax treatment are the 9 no-income-tax states (especially Florida, Nevada, South Dakota, Tennessee, Texas, Wyoming, and Alaska), plus Illinois (no tax on any retirement income despite 4.95% flat rate on wages), Mississippi (no tax on most retirement income), and Pennsylvania (retirement distributions from qualified plans are exempt for those at normal retirement age).