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Tax Breaks

Alaska: The Tax-Friendliest State for Retirement

The cold-weather destination offers a warm welcome to retirees.

Retirees have special concerns when it comes to taxes. Does the state tax Social Security benefits? Are there property tax breaks for seniors? The answers can have a big impact on a fixed income.

See Also: 15 Worst States for Retirement

We analyzed the tax policies of all 50 states and the District of Columbia to identify the tax-friendliest state for retirement. Surprisingly, our top pick isn’t Florida or Arizona, though both earn high marks. You need to head north—way north—to find the best state for taxes on retirees. It’s Alaska.

The Last Frontier isn’t a natural choice for retirement, but perhaps it should be. Yes, it’s cold. But it’s also a haven for outdoorsy types and the scenery is spectacular. As for taxes, there’s no state sales tax, estate tax, inheritance tax or income tax.

Alaska residents enjoy an added bonus: a cut of the state’s oil riches. The annual dividend check topped $2,000 in 2015.

Check out 14 more high-ranking states for taxes on retirees.