State Income Tax on Retirement Income: Which States Tax Social Security and Pensions

Federal income tax rules for Social Security and pensions get a lot of attention, but state tax rules matter just as much - and they vary enormously from one state to the next. The state you live in can mean the difference between paying several thousand dollars in additional tax on your retirement income each year or paying nothing at all. This guide explains the major patterns and how to find the specifics for your state.

States With No Income Tax at All

Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire (taxes investment income only, not wages or retirement income), South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in any of these states, state income tax is simply not a factor for your retirement income.

How States Handle Social Security

At the federal level, up to 85% of Social Security can be taxable depending on your combined income. At the state level, the picture is more favorable for most retirees. As of 2026, the majority of states do not tax Social Security benefits at all.

A smaller number of states do tax Social Security to some degree, and most of those that do offer substantial exemptions based on income. In many cases, the exemption thresholds are set high enough that low- and moderate-income retirees owe no state tax on their benefits even in states that technically "tax" Social Security. The details change frequently as states have been progressively reducing or eliminating these taxes in recent years, so it is worth checking the current rules for your state directly.

How States Handle Pension Income

Pension income - from government pensions, private pensions, and employer plans - is handled differently by each state, and within states there are often distinctions between categories:

• Government pensions (federal, state, military) - some states fully exempt these; others treat them more favorably than private pensions; a few states offer no special treatment
• Private pensions - many states provide partial exemptions or income-based exclusions for private pension income
• Military retirement pay - many states have enacted full or partial exemptions for military retirement income in recent years

A number of states offer a general retirement income deduction or exclusion that covers pension income, Social Security, and sometimes IRA withdrawals up to a certain dollar amount. These deductions are sometimes age-gated (available only at 65 or older) and sometimes income-gated (phased out above a certain household income).

IRA and 401(k) Withdrawals

In most states, traditional IRA and 401(k) withdrawals are treated the same as other ordinary income and are taxed at your state's regular income tax rate. A few states that provide broad retirement income exclusions extend those exclusions to IRA and 401(k) distributions as well, up to the exemption cap.

How to Find Your State's Exact Rules

State tax law is specific and changes regularly. The best way to find current rules is to go directly to your state's department of revenue or department of taxation website. Search for "[your state] retirement income tax" or "[your state] Social Security exemption." AARP also maintains a state-by-state guide to retirement income taxes that is updated regularly and can serve as a useful starting point before you dig into the official rules.

If you are considering moving to a different state in retirement and the tax treatment of your income is a factor, run the numbers carefully - and also account for that state's property taxes, sales taxes, and cost of living, which together often matter more than income tax alone.