State-by-State Guide to Taxes on Retirees
Tool | December 2020

Oklahoma State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

Oklahoma

Add to State Compare List | View List
(0) selected | Compare up to 5

The Bottom Line
Flag of Oklahoma

Mixed Tax Picture

There's good news and bad news for retirees living Oklahoma. The Sooner State doesn't tax Social Security benefits. Residents can also exclude up to $10,000 per person ($20,000 per couple) of other types of retirement income. That's certainly helpful.

But Oklahoma has one of the highest combined state and local sales tax rates in the nation, at an average of 8.95%. Both groceries and clothing are subject to sales tax, too.

Oklahoma falls right in the middle when the median property tax rates for all 50 states are compared. Plus, elderly homeowners may qualify for a rebate or tax "freeze" if their income is below a certain amount.

Income Tax Range

Low: 0.5% (on up to $1,000 of taxable income for single filers and up to $2,000 for married joint filers)

High: 5% (on taxable income over $7,200 for single filers and over $12,200 for married joint filers)

Starting in 2022, the lowest rate will be 0.25% and the highest rate will be 4.75%.

Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

Tax Breaks for Other Retirement Income

Up to $10,000 of federally-taxed income from private, federal government, and designated Oklahoma state and local government retirement plans is exempt. In addition, federally-taxed income from the federal Civil Services Retirement System in lieu of Social Security is fully exempt.

Up to 75% of federally-tax income from a military retirement plan or $10,000, whichever is greater, is exempt.

Railroad Retirement benefits are fully exempt.

Sales Tax

4.5% state levy. Localities can add as much as 7%, and the average combined rate is 8.95%, according to the Tax Foundation.

Groceries: Taxable
Clothing: Taxable
Motor Vehicles: Taxable (1.25%), and 3.25% excise tax applies
Prescription Drugs: Exempt

Real Property Taxes

Residents 65 or older who's gross household income is $12,000 or less may qualify for a $200 rebate on their property taxes. The rebate can be claimed on the resident's Oklahoma income tax form.

Senior citizens with household income income of $73,800 or less may also qualify for a valuation freeze on their primary residence.

Annual Car Taxes and Fees

An annual vehicle registration fee based on the car's age is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.

Advertisement