The following 11 states do not tax retirement income:
- Alabama
- Alaska
- Florida
- Georgia
- Hawaii
- Louisiana
- Mississippi
- Nevada
- South
Dakota
- Texas
- Wyoming
It's worth noting that some states that don't tax retirement
income may still have other taxes, such as sales or property taxes. Additionally,
some states may offer exemptions or deductions for certain types of retirement
income, such as pension or Social Security benefits. It's a good idea to
research the tax laws in a state before making a decision to move there in
retirement.
Alabama
In Alabama, retirement income is generally not taxed. This
includes income from pensions, 401(k)s, IRAs, and Social Security benefits.
Alabama does not have a state income tax, so retirees do not have to pay state
taxes on their retirement income. However, Alabama does have a state sales tax
of 4%, and property taxes are also collected by local governments.
Additionally, Alabama does not have an estate or inheritance tax.
It's important to note that while Alabama does not tax
retirement income, the state does have taxes on other forms of income, such as
interest and dividends. Additionally, Alabama has a use tax, which is applied
to purchases made out of state and brought into Alabama.
Alaska
Alaska does not have a state income tax, which means that
retirement income is not taxed by the state. This includes income from
pensions, 401(k)s, IRAs, and Social Security benefits.
Alaska does have a Permanent Fund Dividend, which is a
program that distributes a portion of the state's oil revenue to residents of
Alaska. However, this is not considered as a tax and it is not based on income
or taxes.
However, Alaska does have other taxes such as Sales tax,
property tax and local taxes. Sales tax rate is 1% to 7%, depending on the
area. Property taxes are collected by local governments, and the rate can vary
depending on the location.
It's important to note that while Alaska does not tax
retirement income, the state does have taxes on other forms of income, such as
oil and gas production. Additionally, Alaska has a use tax, which is applied to
purchases made out of state and brought into Alaska.
Florida
In Florida, retirement income is generally not taxed by the
state. This includes income from pensions, 401(k)s, IRAs, and Social Security
benefits. Florida does not have a state income tax, so retirees do not have to
pay state taxes on their retirement income.
Florida does have a sales tax of 6%, and property taxes are
also collected by local governments. Additionally, Florida does not have an
estate or inheritance tax.
It's important to note that while Florida does not tax
retirement income, the state does have taxes on other forms of income, such as
interest and dividends. Additionally, Florida has a use tax, which is applied
to purchases made out of state and brought into Florida.
Overall, Florida is considered as a tax-friendly state for
retirees, with a warm climate and a wide range of recreational activities and
cultural events, it's considered as a popular destination for retirees.
Georgia
In Georgia, retirement income is generally not taxed by the
state. This includes income from pensions, 401(k)s, IRAs, and Social Security
benefits. Georgia has a state income tax, but it does not apply to retirement
income. However, Georgia does have a state sales tax of 4%, and property taxes
are also collected by local governments. Additionally, Georgia does not have an
estate or inheritance tax.
It's important to note that while Georgia does not tax
retirement income, the state does have taxes on other forms of income, such as
interest and dividends. Additionally, Georgia has a use tax, which is applied
to purchases made out of state and brought into Georgia.
Overall, Georgia is considered as a tax-friendly state for
retirees, with a low cost of living and a diverse range of recreational
activities and cultural events, it's considered as a popular destination for
retirees.
Hawaii
Hawaii does not tax most forms of retirement income,
including pensions, 401(k)s, IRAs, and Social Security benefits. However, it
does tax investment income, such as interest, dividends, and capital gains.
Hawaii has a state income tax, but it does not apply to most
of the retirement income. The state income tax rate ranges from 1.4% to 11%,
depending on the level of income.
Hawaii also has a general excise tax, which is similar to a
sales tax, and it ranges from 4% to 4.5%, depending on the county.
Additionally, Hawaii has a property tax, which is collected by local governments.
It's important to note that Hawaii is considered as one of
the most expensive states to live in the US, with high cost of living,
particularly for housing and groceries. This is something to consider when
assessing whether Hawaii is a tax-friendly state for retirees.
Louisiana
In Louisiana, retirement income is generally not taxed by
the state. This includes income from pensions, 401(k)s, IRAs, and Social
Security benefits. Louisiana has a state income tax, but it does not apply to
most of the retirement income. However, Louisiana does have a state sales tax
of 4.45%, and property taxes are also collected by local governments.
Additionally, Louisiana does not have an estate or inheritance tax.
It's worth noting that some forms of retirement income, such
as military retirement pay and certain types of federal retirement pay, are
taxed in Louisiana at a rate of 2%. Additionally, certain types of retirement
income, such as distributions from qualified plans and IRAs, may be subject to
Louisiana state income tax if they are not considered as fully taxable at the
federal level.
It's important to note that while Louisiana does not tax
most of the retirement income, the state does have taxes on other forms of
income, such as interest and dividends. Additionally, Louisiana has a use tax,
which is applied to purchases made out of state and brought into Louisiana.
Mississippi
In Mississippi, retirement income is generally not taxed by
the state. This includes income from pensions, 401(k)s, IRAs, and Social
Security benefits. Mississippi has a state income tax, but it does not apply to
most of the retirement income.
Mississippi does have a state sales tax of 7%, and property
taxes are also collected by local governments. Additionally, Mississippi does
not have an estate or inheritance tax.
It's important to note that while Mississippi does not tax
most of the retirement income, the state does have taxes on other forms of
income, such as interest and dividends. Additionally, Mississippi has a use
tax, which is applied to purchases made out of state and brought into
Mississippi.
Overall, Mississippi is considered as a tax-friendly state
for retirees, with a low cost of living and a diverse range of recreational
activities and cultural events, it's considered as a popular destination for
retirees.
Nevada
Nevada does not have a state income tax, which means that
retirement income is not taxed by the state. This includes income from
pensions, 401(k)s, IRAs, and Social Security benefits.
Nevada does have a sales tax of 6.85%, and property taxes
are also collected by local governments. Additionally, Nevada does not have an
estate or inheritance tax.
It's important to note that while Nevada does not tax
retirement income, the state does have taxes on other forms of income, such as
gambling winnings. Additionally, Nevada has a use tax, which is applied to
purchases made out of state and brought into Nevada.
Overall, Nevada is considered as a tax-friendly state for
retirees, with a warm climate and a wide range of recreational activities and
cultural events, it's considered as a popular destination for retirees.
South Dakota
South Dakota does not have a state income tax, which means
that retirement income is not taxed by the state. This includes income from
pensions, 401(k)s, IRAs, and Social Security benefits.
South Dakota does have a sales tax of 4.5%, and property
taxes are also collected by local governments. Additionally, South Dakota does
not have an estate or inheritance tax.
It's important to note that while South Dakota does not tax
retirement income, the state does have taxes on other forms of income, such as
interest and dividends. Additionally, South Dakota has a use tax, which is
applied to purchases made out of state and brought into South Dakota.
Overall, South Dakota is considered as a tax-friendly state
for retirees, with a low cost of living and a diverse range of recreational
activities and cultural events, it's considered as a popular destination for
retirees.
Texas
Texas does not have a state income tax, which means that
retirement income is not taxed by the state. This includes income from
pensions, 401(k)s, IRAs, and Social Security benefits.
Texas does have a sales tax of 6.25%, and property taxes are
also collected by local governments. Additionally, Texas does not have an
estate or inheritance tax.
It's important to note that while Texas does not tax
retirement income, the state does have taxes on other forms of income, such as
interest and dividends. Additionally, Texas has a use tax, which is applied to
purchases made out of state and brought into Texas.
Overall, Texas is considered as a tax-friendly state for
retirees, with a warm climate and a wide range of recreational activities and
cultural events, it's considered as a popular destination for retirees.
However, the state has high property taxes and homeowners should be mindful of
that when considering a move to Texas.
Wyoming
Wyoming does not have a state income tax, which means that
retirement income is not taxed by the state. This includes income from
pensions, 401(k)s, IRAs, and Social Security benefits.
Wyoming does have a sales tax of 4%, and property taxes are
also collected by local governments. Additionally, Wyoming does not have an
estate or inheritance tax.
It's important to note that while Wyoming does not tax
retirement income, the state does have taxes on other forms of income, such as
interest and dividends. Additionally, Wyoming has a use tax, which is applied
to purchases made out of state and brought into Wyoming.
Overall, Wyoming is considered as a tax-friendly state for
retirees, with a low cost of living, a great natural beauty and a diverse range
of recreational activities and cultural events, it's considered as a popular
destination for retirees. However, it's worth noting that the state is
relatively sparsely populated, so retirees should consider if they are
comfortable living in a rural area before making a move to Wyoming.