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US 50 STATES RANKING · 2026 TAX YEAR

Retirement Income Tax by State (2026)

Compare how all US states tax pensions, Social Security benefits, and 401(k) / IRA withdrawals. Find the most tax-friendly states for retirees.

The 9 States with Zero State Income Tax

These states levy 0% personal income tax on all retirement income, including Social Security, pensions, and 401(k)/IRA distributions:

AlaskaFloridaNevadaNew HampshireSouth DakotaTennesseeTexasWashingtonWyoming
StateCategoryTop Tax RateTaxes Social Security?Pension ExemptionKey Takeaway
AlaskaMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)No state income tax or state sales tax. Permanent Fund Dividend bonus.
FloridaMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)No individual income tax. Popular top retirement destination.
NevadaMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)No state income tax on any retirement pensions or distributions.
New HampshireMost Friendly0%✓ No (Exempt)Fully ExemptNo income tax on wage or retirement income (interest/dividends tax phased out).
South DakotaMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)Zero state individual income tax.
TennesseeMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)No individual income tax; Hall Tax repealed.
TexasMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)Zero personal income tax constitutionally protected.
WashingtonMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)No personal income tax (high capital gains excise tax on non-retirement).
WyomingMost Friendly0%✓ No (Exempt)Fully Exempt (No state tax)Zero personal income tax and low property taxes.
IllinoisFriendly4.95%✓ No (Exempt)100% ExemptCompletely exempts all qualified retirement pensions and 401(k)/IRAs.
MississippiFriendly4%✓ No (Exempt)100% ExemptExempts all qualified retirement plan distributions.
PennsylvaniaFriendly3.07%✓ No (Exempt)100% Exempt after 59½Exempts qualified employer pensions, 401(k) and IRA withdrawals at age 59½+.
GeorgiaFriendly4.99%✓ No (Exempt)Up to $65,000 exempt (65+)Generous exclusion of up to $65,000 per person aged 65 and older.
South CarolinaFriendly6.4%✓ No (Exempt)Up to $10,000 (65+)Does not tax Social Security; substantial senior deductions.
ArizonaFriendly2.5%✓ No (Exempt)Up to $2,500 exemptFlat 2.5% rate; zero tax on Social Security.
North CarolinaFriendly4.25%✓ No (Exempt)No special exemptionFlat rate dropping to 3.99%; zero tax on Social Security.
MichiganFriendly4.25%✓ No (Exempt)Phasing in full exemptionRestoring pension exemptions under Lowering MI Costs Plan.
AlabamaModerately Friendly5%✓ No (Exempt)Defined benefit pensions exemptTraditional pensions exempt; 401(k)/IRAs generally taxed.
New YorkModerately Friendly10.9%✓ No (Exempt)Up to $20,000 exempt (59½+)Exempts Social Security + up to $20k private pensions; high top brackets.
CaliforniaLeast Friendly13.3%✓ No (Exempt)Fully taxableExempts Social Security, but taxes all pensions and 401k/IRAs up to 13.3%.
MinnesotaLeast Friendly9.85%⚠️ Yes (Taxable)Income-capped exemptionTaxes Social Security above income thresholds and high state tax brackets.
VermontLeast Friendly8.75%⚠️ Yes (Taxable)Limited exemptionTaxes portion of Social Security for moderate to higher incomes.
ConnecticutLeast Friendly6.99%⚠️ Yes (Taxable)Income-based exemptionSubject to high wealth and income tax brackets.
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