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.
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 (4): Georgia, Iowa, 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, Hawaii, Massachusetts, Minnesota, Idaho, Indiana.
Every state compared
The effective-rate column estimates what a 65-year-old single filer pays in state income tax on $40,000 a year of retirement-account withdrawals, after that state's deductions and retirement exclusions. 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 | ~3.5% | 9.29% | 0.36% | — |
| Alaska | None | No | 0% | 1.82% | 1.04% | — |
| Arizona | Flat 2.5% | No | ~2.2% | 8.38% | 0.45% | — |
| Arkansas | Graduated | No | ~2.5% | 9.45% | 0.53% | — |
| California | Graduated | No | ~1.5% | 8.85% | 0.68% | — |
| Colorado | Flat 4.4% | Yes, above a threshold | ~1.8% | 7.81% | 0.45% | — |
| Connecticut | Graduated | Yes, above a threshold | ~0.5% | 6.35% | 1.78% | Estate + Gift |
| Delaware | Graduated | No | ~2.5% | 0% | 0.48% | — |
| Florida | None | No | 0% | 7% | 0.71% | — |
| Georgia | Flat rate | No | 0% | 7.42% | 0.72% | — |
| Hawaii | Graduated | No | ~4.5% | 4.5% | 0.26% | Estate |
| Idaho | Flat rate | No | ~4% | 6.03% | 0.47% | — |
| Illinois | Flat 4.95% — but not on retirement income | No | 0% | 8.86% | 1.95% | Estate |
| Indiana | Flat state rate near 3% | No | ~4% | 7% | 0.71% | — |
| Iowa | Flat 3.8% | No | 0% | 6.94% | 1.4% | — |
| Kansas | Two brackets | No | ~4% | 8.65% | 1.26% | — |
| Kentucky | Flat rate | No | ~0.9% | 6% | 0.74% | Inheritance |
| Louisiana | Flat 3% from 2025 | No | ~2.5% | 9.56% | 0.51% | — |
| Maine | Graduated | No | ~0.5% | 5.5% | 1.09% | Estate |
| Maryland | Graduated 2%–5.75% | No | ~3.5% | 6% | 0.95% | Estate + Inheritance |
| Massachusetts | Flat 5% | No | ~4.5% | 6.25% | 1.04% | Estate |
| Michigan | Flat 4.25% | No | ~1% | 6% | 1.24% | — |
| Minnesota | Graduated | Yes, above a threshold | ~4.5% | 8.04% | 0.98% | Estate |
| Mississippi | Flat rate falling toward 3% | No | 0% | 7.06% | 0.52% | — |
| Missouri | Graduated | No | ~3% | 8.39% | 0.82% | — |
| Montana | Two brackets | Yes, above a threshold | ~4% | 0% | 0.69% | — |
| Nebraska | Graduated | No | ~3.5% | 6.97% | 1.44% | Inheritance |
| Nevada | None | No | 0% | 8.24% | 0.44% | — |
| New Hampshire | None | No | 0% | 0% | 1.61% | — |
| New Jersey | Graduated | No | 0% | 6.6% | 2.23% | Estate + Inheritance |
| New Mexico | Graduated | Yes, above a threshold | ~2% | 7.62% | 0.67% | — |
| New York | Graduated | No | ~2.3% | 8.53% | 1.4% | Estate |
| North Carolina | Flat rate | No | ~3.6% | 7% | 0.63% | — |
| North Dakota | Graduated | No | 0% | 7.04% | 0.88% | — |
| Ohio | Graduated | No | ~1.5% | 7.24% | 1.3% | — |
| Oklahoma | Graduated | No | ~2.8% | 8.99% | 0.76% | — |
| Oregon | Graduated | No | ~7% | 0% | 0.77% | Estate |
| Pennsylvania | Flat 3.07% | No | 0% | 6.34% | 1.26% | Inheritance |
| Rhode Island | Graduated | Yes, above a threshold | ~1% | 7% | 1.3% | Estate |
| South Carolina | Graduated | No | ~2.5% | 7.5% | 0.46% | — |
| South Dakota | None | No | 0% | 6.11% | 1.01% | — |
| Tennessee | None | No | 0% | 9.55% | 0.48% | — |
| Texas | None | No | 0% | 8.2% | 1.47% | — |
| Utah | Flat rate | Yes, above a threshold | ~3.4% | 7.25% | 0.47% | — |
| Vermont | Graduated | Yes, above a threshold | ~3% | 6.36% | 1.78% | Estate |
| Virginia | Graduated | No | ~3% | 5.77% | 0.72% | — |
| Washington | None | No | 0% | 9.38% | 0.76% | Estate |
| Washington, D.C. | Graduated | No | ~4% | 6% | 0.55% | Estate |
| West Virginia | Graduated | No | ~2.5% | 6.57% | 0.55% | — |
| Wisconsin | Graduated | No | ~3.5% | 5.7% | 1.51% | — |
| Wyoming | None | No | 0% | 5.44% | 0.55% | — |
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. New Jersey's 2.23% and Illinois' 1.95% 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, Georgia, Iowa, 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 2025 tax year. Many states are mid-way through scheduled rate cuts; confirm current figures with the relevant state agency (listed at taxadmin.org).