What States Don't Tax Retirement Income?
In the United States, there are 13 states that do not tax retirement income. 9 of which do not have any income tax, whatsoever. Those states are:
- Alaska
- Florida
- New Hampshire
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Four other states have an income tax but do not tax retirement income. Those states are:
- Illinois
- Iowa
- Mississippi
- Pennsylvania
Tax law differs from state to state, so it’s essential to learn more before deciding where to move for retirement.
Understanding which states don’t tax retirement income can be key to a comfortable and financially stable retirement. For those considering Acts Retirement-Life Communities, several locations offer a tax-friendly environment that protects your nest egg from unnecessary erosion.
Florida tops the list—not only does the state have no income tax, but it also does not tax Social Security, pensions, IRAs, or 401(k) withdrawals (Florida Department of Revenue). Pennsylvania is another retiree haven, exempting all Social Security, public and private pensions, and IRA distributions from taxation, provided the retiree is at least 59½ and separated from service (PA Department of Revenue). Delaware offers partial exemptions on retirement income: individuals 60 and older can exclude up to $12,500 per year (Delaware.gov). Alabama does not tax traditional pension income or Social Security, though IRA and 401(k) income may be partially taxed depending on distribution type (Alabama Department of Revenue).
Acts communities in these states provide not just a fulfilling lifestyle, but a practical financial choice for those seeking to reduce tax burdens during retirement.
You can learn more about the various and wonderful communities in these four states: