States That Don't Tax Retirement Income in 2026: Social Security, Pensions and IRAs

Updated 2026-10-03 · Reviewed against official government sources

In 2026, 42 states plus DC don't tax Social Security benefits. West Virginia joined the list this year when its phase-out finished. Only eight states still tax benefits, and most of them exempt middle-income retirees. Pensions, IRA and 401(k) withdrawals are a different story. They're fully tax-free in the nine no-income-tax states and in a handful of others, like Illinois, Mississippi, Pennsylvania and Iowa. Here's the state-by-state picture with examples.

The 8 states that tax Social Security in 2026

These states may tax some of the Social Security that's federally taxable, usually above an income threshold. Many retirees in these states still owe nothing on their benefits.

State	How Social Security is treated (2026)
Colorado	Taxpayers 65+ can subtract all federally taxable benefits; younger retirees get a capped subtraction
Connecticut	Fully exempt below $75,000 AGI (single) / $100,000 (joint); partial above
Minnesota	Fully exempt below an indexed AGI threshold, phased out above it
Montana	Taxed under its own formula, similar to federal rules
New Mexico	Exempt for AGI up to $100,000 single / $150,000 joint
Rhode Island	Exempt if you have reached full retirement age and are under the indexed AGI limit
Utah	Taxed, but a nonrefundable Social Security credit removes the tax for most moderate incomes
Vermont	Fully exempt below an AGI threshold, partial above it

States where pensions and retirement withdrawals are tax-free too

No income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington's capital gains tax doesn't apply to retirement accounts.
Illinois (4.95% on other income): Social Security, pensions, IRA and 401(k) distributions are exempt.
Mississippi: Social Security, qualified pensions, IRA and 401(k) distributions are exempt once you meet the plan's retirement requirements.
Pennsylvania (3.07%): retirement income is exempt after you retire from the employer's plan, and IRA withdrawals are exempt after age 59½.
Iowa: all retirement income is exempt for people 55 and older, and Social Security is exempt at any age.
Michigan: the phase-in is complete for 2026, so qualifying pension and retirement income is deductible up to an indexed cap regardless of birth year.

Partial exclusions in other states

Many states tax pensions but give a fixed exclusion, often tied to age. Some common ones:

State	Retirement income break (2026)
New York	Government pensions (NY and federal) fully exempt; up to $20,000 of other pension/IRA income excluded at 59½+
Georgia	Retirement exclusion of $35,000 (ages 62–64) or $65,000 (65+) per person
Alabama	Defined-benefit pensions exempt; $6,000 exclusion for other retirement income at 65+
Hawaii	Employer-funded pensions exempt; IRA and 401(k) withdrawals taxed
South Carolina	Retirement income deduction plus an age-65 deduction
New Jersey	Pension/retirement exclusion up to $100,000 (joint) for incomes up to $100,000, with a phase-out to $150,000
California	Social Security exempt; pensions and IRA withdrawals fully taxed

Worked example: $30,000 Social Security + $40,000 pension

A married couple, both 66, receives $30,000 in Social Security and $40,000 from a private pension.

In Florida, Illinois or Pennsylvania, they pay $0 in state income tax. In Georgia, the $65,000-per-person exclusion covers the whole pension, so they also pay $0. In New York, they exclude $20,000 each, and with just one pension in the household, $20,000 of the pension stays taxable. New York's joint standard deduction is $16,050, so only about $3,950 is taxed, which comes to roughly $155. In California, the full $40,000 pension is taxable. But after the $11,800 standard deduction, the $316 joint personal credit and two $158 senior exemption credits, the tax is $0. With a $100,000 pension, the same couple would owe California about $1,630.

On a modest income the differences are small. They grow quickly once IRA withdrawals or pensions reach six figures.

Federal tax still applies

Wherever you live, up to 85% of Social Security can be federally taxable, depending on your "provisional income." Pensions and traditional IRA withdrawals are fully taxable. For 2025–2028, taxpayers 65 and older get an extra federal deduction of up to $6,000 per person, which phases out at higher incomes. Use the federal income tax calculator to see your combined bill.

Required minimum distributions and Roth conversions: timing by state

Where you live in the year money comes out of a traditional IRA or 401(k) decides which state can tax it. Required minimum distributions (RMDs) generally start at age 73, so the state you live in at 73 and later matters more than where you earned the money. Federal law (4 U.S.C. §114) stops your old state from taxing retirement plan income paid to you as a nonresident.

That makes Roth conversions a planning tool. A conversion is taxed as ordinary income in the year you do it. If you plan to retire from California to Nevada or Florida, converting after you establish residency in the new state can avoid state tax on the conversion entirely. Converting the year before you move would mean California tax at up to 12.3%, or 13.3% on taxable income above $1 million.

Qualified Roth IRA withdrawals are tax-free federally, and states that start from federal adjusted gross income generally don't tax them either.
Lump-sum and early withdrawals follow the same rule: the state where you live when you receive the money taxes it.
If you split the year between two states, each part-year return covers the distributions received while you lived there.

Look past income tax: property and sales tax in retirement

Once paychecks stop, income tax often becomes a smaller part of a retiree's bill than property and sales tax. Several states with no income tax rely on property tax, but they also give homeowners age 65 and older extra relief.

State	Income tax on retirement income	Senior property tax break (homestead)	Average combined sales tax
Texas	None	School-tax homestead exemption of $200,000 for owners 65+ or disabled (vs $140,000 for others)	8.20%
Florida	None	Up to $50,000 homestead exemption; Save Our Homes caps yearly assessment increases at 3% or inflation	6.98%
New Hampshire	None	Among the highest property taxes in the US; local elderly exemptions vary by town	0.00%
Pennsylvania	Retirement income exempt	Property Tax/Rent Rebate program for lower-income seniors	6.34%

A checklist for comparing retirement states

List your expected income by type: Social Security, pension, IRA or 401(k) withdrawals, and investment income. Many states treat each differently.
Check age rules. Exclusions in Georgia, New York, Alabama and Iowa depend on your age, and some apply per person, which helps couples.
Price a typical home in the area you want and look up the local property tax rate and senior exemptions.
Estimate taxable spending and multiply it by the local combined sales tax rate.
Consider estate and inheritance taxes if you plan to leave a large estate. A handful of states levy them, even some that don't tax retirement income.
Check where your health care and family are. Moving twice is more expensive than any tax difference.

Related calculators & guides

Frequently asked questions

Which states tax Social Security in 2026?

Eight: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. Most of them exempt retirees below income thresholds.

Does West Virginia tax Social Security in 2026?

No. The three-year phase-out finished in 2026, so benefits are fully exempt.

Which states don't tax pensions or 401(k) withdrawals?

The nine no-income-tax states plus Illinois, Mississippi, Pennsylvania (after retirement or 59½), Iowa (55+) and, up to a cap, Michigan.

Does California tax retirement income?

California exempts Social Security but taxes pensions, IRA and 401(k) withdrawals at regular rates of 1%–12.3%.

If I move in retirement, which state taxes my pension?

Your state of residence when you receive it. Federal law (4 U.S.C. §114) bars your former state from taxing pension income paid to nonresidents.

Are required minimum distributions taxed by my state?

Yes, if your state taxes IRA or 401(k) withdrawals. RMDs are treated like any other traditional retirement distribution. They are tax-free in the nine no-income-tax states and in states that exempt retirement income, such as Illinois, Mississippi and Pennsylvania.

Should I do a Roth conversion before or after moving to a no-tax state?

After, if state tax is the main concern. The conversion is taxed in the year it happens by the state where you live then. Converting after you establish residency in a state like Florida or Nevada avoids state income tax on it.

Do states tax qualified Roth IRA withdrawals?

Generally no. Qualified Roth distributions are excluded from federal adjusted gross income, and states that start from federal AGI don't tax them either.

Sources

Figures are taken from official government publications and were last reviewed on 2026-10-03.