Alabama
Pensions: If you want to be able to count on your pension in retirement, then Alabama is a good retirement destination. If you’ve worked in the private sector, your pension is exempt from taxes in the Cotton State. In addition, military retirement pay and income will also not be taxed.
401(k)s and IRAs: Although Alabama offers certain advantages to retirees when it comes to taxes, not all retirement income is tax-exempt. The “Heart of Dixie” taxes 401(k)s and other defined-contribution retirement plans such as the traditional IRA as ordinary income.
Social Security Benefits: Alabama doesn’t levy any tax on Social Security benefits. That’s another advantage for retirees, apart from the warm climate and Southern hospitality.
Income Tax Range: When it comes to 401(k) funds, IRA distributions or any other ordinary income, the taxes range from 2% up to 5%, slightly below the national average. The lowest percentage is valid for up to $1,000 of taxable income for joint filers and up to $500 for all others and the highest is applied to more than $6,000 of taxable income for joint filers and over $3,000 of taxable income for the rest.
Alaska
Pensions: Sure, Alaska is cold but if you can get over this fact, retiree life in the largest states in the United States can be quite fun. That’s because retirees in Alaska don’t have to pay income tax on their pension or on any other income. It’s one of the few states that doesn’t levy an income tax.
401(k)s and IRAs: 401(k) and IRA distributions are also tax-exempt.
Social Security Benefits: Alaska could be a much nicer place to retire than you think because it doesn’t tax Social Security benefits.
Income Tax Range: Not applicable since there is no income tax.
20 comments on “14 States Where Your Pension Won’t Get Taxed”
But wherever you live, you’ll still pay federal income tax on it.
Hopefully, the State of Maine will stop taxing our State Pensions soon!!
The state of new jersey sucks big time they dont even increase veterans deduction
new jersey is known for high property taxes. I don’t think New York is any better.
This site is bullshit. I do not see the list of States and I am not putting up with this advertising nonsense to find out. I can do that on my own.
how about delaware
How many of these states have a high sales tax instead of taxing income? I know Washington does. No income tax – but state, counties and cities all charge sales tax.
What about Kentucky
Washington State; correct, no income tax…yet! The Gov. has been pushing for one for years. Where did you get they don’t tax SS benefits?? They tax the crap out of me, both Social Security and 457 (like IRA’s) disbursements. And, every city/county has a sales tax as high as 10.3%.
NJ is unconstitutional and discriminatory the way they tax certain pensions and not others.
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