Retirement Taxes by State
The state you retire in changes how long your money lasts — but usually by less than people assume, and rarely in the direction the headlines suggest. Here is every state, what it taxes, and what it charges instead. For what that does to a real retirement, see how long $500,000 lasts in every state.
The short version
- No state income tax at all (9): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
- Income tax, but retirement income is exempt (3): Illinois, Mississippi, Pennsylvania.
- Exclusions big enough that most retirees owe nothing (8): Colorado, Connecticut, Georgia, Iowa, Maine, Michigan, New Jersey, North Dakota.
- Still tax Social Security (8): Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont — all with income thresholds that exempt most retirees.
- Hardest on portfolio withdrawals: Oregon, Indiana, Massachusetts, Maryland, Kansas, Alabama.
Every state compared
The effective-rate column is what a 65-year-old single filer pays in state income tax on $40,000 a year of IRA withdrawals, after that state's deductions and retirement exclusions, computed from the 2026 rules. Indiana and Maryland include a typical county income tax. It is a planning figure for comparison, not a filing figure.
| State | Income tax | Taxes Social Security? | Est. effective rate | Sales tax | Property tax | Estate / inheritance |
|---|---|---|---|---|---|---|
| Alabama | Graduated | No | ~3.4% | 9.46% | 0.37% | — |
| Alaska | None | No | 0% | 1.82% | 0.94% | — |
| Arizona | Flat 2.5% | No | ~1% | 8.52% | 0.48% | — |
| Arkansas | Graduated | No | ~1.9% | 9.46% | 0.56% | — |
| California | Graduated | No | ~1.1% | 8.99% | 0.7% | — |
| Colorado | Flat 4.4% | Yes, above a threshold | 0% | 7.89% | 0.5% | — |
| Connecticut | Graduated | Yes, above a threshold | 0% | 6.35% | 1.54% | Estate + Gift |
| Delaware | Graduated | No | ~1.5% | 0% | 0.54% | — |
| Florida | None | No | 0% | 6.98% | 0.78% | — |
| Georgia | Flat 4.99% for 2026 | No | 0% | 7.49% | 0.79% | — |
| Hawaii | Graduated | No | ~3.1% | 4.5% | 0.29% | Estate |
| Idaho | Flat 5.3% | No | ~1.5% | 6.03% | 0.5% | — |
| Illinois | Flat 4.95% — but not on retirement income | No | 0% | 8.96% | 1.88% | Estate |
| Indiana | Flat 2.95% for 2026 | No | ~4.7% | 7% | 0.76% | — |
| Iowa | Flat 3.8% | No | 0% | 6.94% | 1.33% | — |
| Kansas | Two brackets | No | ~3.5% | 8.69% | 1.21% | — |
| Kentucky | Flat 3.5% for 2026 | No | ~0.4% | 6% | 0.74% | Inheritance |
| Louisiana | Flat 3% from 2025 | No | ~1.1% | 10.11% | 0.55% | — |
| Maine | Graduated | No | 0% | 5.5% | 0.98% | Estate |
| Maryland | Graduated 2%–6.5% | No | ~3.8% | 6% | 0.92% | Estate + Inheritance |
| Massachusetts | Flat 5% | No | ~4.4% | 6.25% | 1% | Estate |
| Michigan | Flat 4.25% | No | 0% | 6% | 1.19% | — |
| Minnesota | Graduated | Yes, above a threshold | ~3% | 8.14% | 1% | Estate |
| Mississippi | Flat 4% above the first $10 | No | 0% | 7.06% | 0.58% | — |
| Missouri | Graduated | No | ~2.1% | 8.44% | 0.89% | — |
| Montana | Two brackets | Yes, above a threshold | ~1.2% | 0% | 0.61% | — |
| Nebraska | Graduated | No | ~2.1% | 6.98% | 1.44% | Inheritance |
| Nevada | None | No | 0% | 8.24% | 0.5% | — |
| New Hampshire | None | No | 0% | 0% | 1.5% | — |
| New Jersey | Graduated | No | 0% | 6.6% | 1.88% | Estate + Inheritance |
| New Mexico | Graduated | Yes, above a threshold | ~1.7% | 7.67% | 0.63% | — |
| New York | Graduated | No | ~1.2% | 8.54% | 1.3% | Estate |
| North Carolina | Flat 3.99% for 2026 | No | ~2.7% | 7% | 0.66% | — |
| North Dakota | Graduated | No | 0% | 7.09% | 0.92% | — |
| Ohio | 0% on the first $26 | No | ~1% | 7.29% | 1.36% | — |
| Oklahoma | Graduated | No | ~2% | 9.06% | 0.79% | — |
| Oregon | Graduated | No | ~6% | 0% | 0.81% | Estate |
| Pennsylvania | Flat 3.07% | No | 0% | 6.34% | 1.26% | Inheritance |
| Rhode Island | Graduated | Yes, above a threshold | ~2.2% | 7% | 1.12% | Estate |
| South Carolina | 1.99% up to $30 | No | ~0.4% | 7.49% | 0.49% | — |
| South Dakota | None | No | 0% | 6.11% | 1% | — |
| Tennessee | None | No | 0% | 9.61% | 0.52% | — |
| Texas | None | No | 0% | 8.2% | 1.4% | — |
| Utah | Flat 4.45% for 2026 | Yes, above a threshold | ~2.4% | 7.42% | 0.48% | — |
| Vermont | Graduated | Yes, above a threshold | ~2.2% | 6.39% | 1.51% | Estate |
| Virginia | Graduated | No | ~1.9% | 5.77% | 0.78% | — |
| Washington | None | No | 0% | 9.51% | 0.75% | Estate |
| Washington, D.C. | Graduated | No | ~2.8% | 6% | 0.6% | Estate |
| West Virginia | Graduated | No | ~2% | 6.59% | 0.51% | — |
| Wisconsin | Graduated | No | ~2.7% | 5.72% | 1.32% | — |
| Wyoming | None | No | 0% | 5.56% | 0.53% | — |
What actually moves the needle
Run the arithmetic before running the moving van. On a $500,000 balance withdrawn at $2,500 a month, going from a 5% effective state tax to zero extends the money by roughly 1.3 years. That is worth having. It is also less than the difference between a paid-off house and a mortgage, and less than the difference between claiming Social Security at 62 and at 70.
Three things routinely swamp the income tax comparison:
- Property tax on the house you actually buy. Illinois's 1.88% and New Jersey's 1.88% effective rates cost more each year than most states' income tax on a retiree.
- Estate tax thresholds. Oregon taxes estates above $1 million and Massachusetts above $2 million. A house plus a portfolio clears that easily, and neither state is on anyone's list of "high tax" for retirees.
- Healthcare access. Distance to a specialist is not a tax, but it is a cost, and it rises with age in a way the tax bill does not.
Pick your state
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Frequently asked questions
Which states are best for retirement taxes?
The 9 states with no income tax at all — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming — plus Illinois, Mississippi, Pennsylvania, which have an income tax but exempt retirement income from it entirely. Beyond those, Colorado, Connecticut, Georgia, Iowa, Maine, Michigan, New Jersey, North Dakota leave a typical retiree owing nothing through exclusions large enough to cover an ordinary drawdown.
Which states tax Social Security?
Eight, for the 2026 tax year: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont. Most exempt the benefit entirely below an income threshold, so far fewer retirees pay than the list implies.
Is it worth moving states to save tax in retirement?
Sometimes, but the saving is usually smaller than expected. States without income tax collect it back through property or sales tax, and for most retirees the state income tax changes how long savings last by months rather than decades. Housing costs, healthcare access and family usually matter more.
Which states have an estate or inheritance tax?
Twelve states and DC levy an estate tax, five levy an inheritance tax, and Maryland levies both. State thresholds are often far below the federal exemption — Oregon starts at $1 million and Massachusetts at $2 million — so an estate that owes nothing federally can still owe at state level.
Related
SavingsLast calculators are educational estimates. They assume a constant average return and steady inflation; real markets are volatile and sequence-of-returns risk can shorten how long money lasts. Nothing here is financial, investment, tax, or legal advice. Consult a qualified professional before making decisions.
Reviewed for the 2026 tax year. Many states are mid-way through scheduled rate cuts; confirm current figures with the relevant state agency (listed at taxadmin.org).
Printed from https://savingslast.com/retirement-taxes-by-state/ on . The figures reflect the inputs shown and the rules as published on that date.