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10 Most Tax-Friendly States for Retirees, 2017


These 10 states impose the lowest taxes on retirees, according to Kiplinger’s 2017 analysis of state taxes. All of them exempt Social Security benefits from state taxes. Most exempt at least a portion of other retirement income, such as pensions and withdrawals from tax-deferred retirement plans. Most also have low property taxes. That’s important, because tax proposals by Republican lawmakers to eliminate or cap the property-tax deduction would effectively increase the tax rate for taxpayers who itemize.

For 2017, we prepared a sample tax return for a hypothetical couple with income from Social Security, a private pension, $5,000 in dividends, and a required minimum withdrawal from an individual retirement account. (See our methodology on the last slide for details.)


Take a look at the most tax-friendly states for retirees. We list the best last.

SEE ALSO: RETIREE TAX MAP: State-by-State Guide to Taxes on Retirees

SEE ALSO: SLIDE SHOW: 10 Least Tax-Friendly States for Retirees

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