{"id":10743,"date":"2025-01-24T06:50:36","date_gmt":"2025-01-24T11:50:36","guid":{"rendered":"https:\/\/www.ecoticias.com\/en\/?p=10743"},"modified":"2025-01-24T06:50:36","modified_gmt":"2025-01-24T11:50:36","slug":"13-states-wont-tax-retirement-income","status":"publish","type":"post","link":"https:\/\/www.ecoticias.com\/en\/13-states-wont-tax-retirement-income\/10743\/","title":{"rendered":"13 states won&#8217;t tax retirement income in 2025 \u2014 Check the complete list"},"content":{"rendered":"<p>While paying <strong>taxes is part of civic responsibility,<\/strong> many retirees look for ways to keep their income intact without unnecessary deductions. Lucky for some retirees, there are a handful of states where you won&#8217;t have to pay income tax on your retirement funds. While moving to one of these states solely to lower your tax bill might not be the only thing you should consider, it\u2019s certainly worth factoring into your long-term plans.<\/p>\n<h2>States that won\u2019t tax your retirement income<\/h2>\n<p>As of 2025, there are nine states that don\u2019t collect any income tax from retirees, or anyone else for that matter. These states fund their budgets through other means like sales taxes and property taxes, rather than imposing an income tax. The states are as follows:<\/p>\n<ol>\n<li>Alaska<\/li>\n<li>Florida<\/li>\n<li>Nevada<\/li>\n<li>New Hampshire<\/li>\n<li>South Dakota<\/li>\n<li>Tennessee<\/li>\n<li>Texas<\/li>\n<li>Washington<\/li>\n<li>Wyoming<\/li>\n<\/ol>\n<p>While <strong>New Hampshire did previously tax dividend and interest income<\/strong>, this tax has been lifted as of 2025. This makes New Hampshire a truly state-tax-free home for all its residents, including retirees. It is important to remember that retirees may still be subject to federal taxes and, in some cases, local city or county taxes, but these states are still attractive to those in their retirement years who are looking to pay the least amount of tax possible.<\/p>\n<h2>States with some exceptions for retirees<\/h2>\n<p>While some states completely forgo taxing retirement income, others still tax income but make exceptions for retirees. These states have specific rules that allow certain types of retirement income to be excluded from taxation. These exemptions are as follows:<\/p>\n<ul>\n<li><strong>Illinois<\/strong>: Distributions from 401(k) plans, pensions, and Social Security payments are not taxed.<\/li>\n<li><strong>Iowa<\/strong>: If you&#8217;re 55 or older, withdrawals from 401(k) plans and IRAs, along with Social Security income, aren\u2019t subject to tax.<\/li>\n<li><strong>Mississippi<\/strong>: The state doesn\u2019t tax income from 401(k)s, IRAs, or Social Security, as long as you meet the retirement plan requirements.<\/li>\n<li><strong>Pennsylvania<\/strong>: While work-based wages are taxed, income from IRAs, 401(k)s, and Social Security benefits isn&#8217;t taxable. Pension income is also exempt from taxes if you&#8217;re at least 60 years old.<\/li>\n<\/ul>\n<h2>States that tax social security income<\/h2>\n<p>Most states don\u2019t tax Social Security benefits, <a href=\"https:\/\/www.ecoticias.com\/en\/9-states-tax-social-security-benefits\/10335\/\">but there are a few where those benefits are subject to state-level taxation<\/a>. These states include:<\/p>\n<ol>\n<li>Colorado<\/li>\n<li>Connecticut<\/li>\n<li>Minnesota<\/li>\n<li>Montana<\/li>\n<li>New Mexico<\/li>\n<li>Rhode Island<\/li>\n<li>Utah<\/li>\n<li>Vermont<\/li>\n<li>West Virginia<\/li>\n<\/ol>\n<p>However, it\u2019s worth noting that <strong>West Virginia has been gradually lowering its tax burden<\/strong> on Social Security income, and by 2026, it will have completely phased out state taxes on these benefits. Retirees living in West Virginia can expect tax relief in the coming years.<\/p>\n<div class=\"flex-1 overflow-hidden @container\/thread\">\n<div class=\"h-full\">\n<div class=\"react-scroll-to-bottom--css-libau-79elbk h-full\">\n<div class=\"react-scroll-to-bottom--css-libau-1n7m0yu\">\n<div class=\"flex flex-col text-sm md:pb-9\">\n<article class=\"w-full scroll-mb-[var(--thread-trailing-height,150px)] text-token-text-primary focus-visible:outline-2 focus-visible:outline-offset-[-4px]\" dir=\"auto\" data-testid=\"conversation-turn-45\" data-scroll-anchor=\"true\">\n<div class=\"m-auto text-base py-[18px] px-3 md:px-4 w-full md:px-5 lg:px-4 xl:px-5\">\n<div class=\"mx-auto flex flex-1 gap-4 text-base md:gap-5 lg:gap-6 md:max-w-3xl\">\n<div class=\"group\/conversation-turn relative flex w-full min-w-0 flex-col agent-turn\">\n<div class=\"flex-col gap-1 md:gap-3\">\n<div class=\"flex max-w-full flex-col flex-grow\">\n<div class=\"min-h-8 text-message flex w-full flex-col items-end gap-2 whitespace-normal break-words text-start [.text-message+&amp;]:mt-5\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"689804e1-ea5b-49c1-8273-1c9977f3391b\" data-message-model-slug=\"gpt-4o-mini\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[3px]\">\n<div class=\"markdown prose w-full break-words dark:prose-invert light\">\n<p>While avoiding state income taxes can significantly benefit a retiree\u2019s budget, it\u2019s important to consider all factors before making a big move. Other costs, such as property taxes and the cost of living, have risen in some of these states. Online realtor Redfin reports that property taxes in Tampa, Florida, have surged by 60% since 2019, and the median home price in Tennessee has jumped from under $250,000 to nearly $390,000 in that same time.<\/p>\n<p>Before packing up and relocating to a state with no income tax, <strong>take some time to do a cost comparison.<\/strong> What will it cost to live where you currently reside versus where you might want to move? Also, consider visiting your prospective new home for an extended period to get a feel for the area. Doing the math now will help you make an <a href=\"https:\/\/www.ecoticias.com\/en\/if-you-are-on-this-list-you-can-retire\/9235\/\">informed decision when planning your retirement lifestyle<\/a>. Many of these states who do not charge income tax make up for it by increasing taxes and prices elsewhere. Make sure that you do your research before committing to relocating for retirement.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>While paying taxes is part of civic responsibility, many retirees look for ways to keep their income intact without unnecessary &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"13 states won&#8217;t tax retirement income in 2025 \u2014 Check the complete list\" class=\"read-more button\" href=\"https:\/\/www.ecoticias.com\/en\/13-states-wont-tax-retirement-income\/10743\/#more-10743\" aria-label=\"Read more about 13 states won&#8217;t tax retirement income in 2025 \u2014 Check the complete list\">Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":10744,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-10743","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","resize-featured-image"],"_links":{"self":[{"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/posts\/10743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/comments?post=10743"}],"version-history":[{"count":0,"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/posts\/10743\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/media\/10744"}],"wp:attachment":[{"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/media?parent=10743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/categories?post=10743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ecoticias.com\/en\/wp-json\/wp\/v2\/tags?post=10743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}