OKLAHOMA
Return to Retiree Tax Map
NICKNAME
The Sooner State
BOTTOM LINE: TAX-FRIENDLY
Oklahoma does not tax Social Security benefits or Civil Service Retirement system retirement benefits. In addition, residents of Oklahoma can exclude up to $10,000 per person ($20,000 per couple) of other types of retirement income. Real estate is assessed at an amount between 11% and 13.5% of its fair market value.
STATE SALES TAX
4.5% (prescription drugs are exempt). Cities, towns and counties may levy local sales taxes. The county tax cannot exceed 2%, but some cities have sales taxes that can reach an additional 4.25%.
INCOME-TAX RANGE
Low: 0.5% (on up to $1,000 of taxable income for single filers and $2,000 for married joint filers)
High: 5.5% (on taxable income over $8,700 for single filers and over $15,000 for married joint filers)
SOCIAL SECURITY
Benefits are not taxed.
EXEMPTIONS FOR OTHER RETIREMENT INCOME
There's an exclusion of up to $10,000 for qualified private pension income. Total public and private pension exemptions cannot exceed $10,000 per person. The retirement benefits must be received from an employee pension benefit plan, an eligible deferred compensation plan, an IRA, annuity or trust or simplified employee pension under IRC section 408, an employee annuity, United States retirement bonds or lump-sum distributions from a retirement plan. For civil-service retirees, each person may exclude their retirement benefits received from the Civil Services Retirement System, including survivor benefits, paid in lieu of Social Security to the extent that such benefits are included in federal adjusted gross income.
PROPERTY TAXES
Real property is assessed at an amount between 11% and 13.5% of its market value. Oklahoma offers a homestead exemption for homeowners, which reduces the property's assessed value by $1,000. In most cases, this will result in a tax savings of $80 to $120. If gross household income is $20,000 a year or less and you meet all of the homestead-exemption requirements, you may qualify for an additional $1,000 exemption.
Tax breaks for seniors: A property-tax refund worth up to $200 is available if you are 65 or older and have an income of $12,000 or less. Senior citizens below certain income limits may qualify for a valuation freeze on their primary residence, meaning that their property tax would not go up just because the value of other homes in the neighborhood had gone up.
INHERITANCE AND ESTATE TAXES
There is no inheritance tax and no estate tax.
Visit RetirementLiving.com for a complete rundown of taxes in Oklahoma.
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