15 States That Won't Tax Your Pension

Some states don't tax pension income no matter your age or how much money you have.

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Retiring from the workforce doesn't always mean you can stop paying income tax. You might need to pay federal taxes on your pension income, and depending where you live, you might pay state income taxes, too.

Most states tax at least a portion of the income from many types of retirement benefit plans. Your state might have a pension exclusion, but chances are it's limited based on your age and/or income. However, some states don't tax pension income no matter your age or how much money you have. 

But, of course, just because a state doesn't tax your pension doesn't mean it won't tax other types of retirement income. Some states might not tax Social Security retirement benefits but will tax 401(k) and IRA distributions. It's always a good idea to see how each state taxes retirees before relocating. You wouldn't want an unpleasant surprise when it comes time to file your tax return.

Take a look at the 14 states that don't tax pension income (states are listed alphabetically). 

Rocky Mengle

Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.

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