Go to Retiree Tax Map Florida Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Most Tax-Friendly One of Kiplinger's top ten most tax-friendly states for retirees, the Sunshine State is very popular with retirees, not just because of its year-round sunshine but also because of the absence of a state income tax. Permanent residents are entitled to a homestead exemption of up to $50,000, regardless of age, and seniors may qualify for an additional exemption. State Sales Tax 6% state levy. Localities can add as much as 2%, and the average combined rate is 6.8%, according to the Tax Foundation. Income Tax Range There is no state income tax. Social Security Benefits are not taxed. Exemptions for Other Retirement Income Retirement income is not taxed.IRAsRetirement income is not taxed.401(k)s and Other Defined-Contribution Employer Retirement PlansRetirement income is not taxed.Private PensionsRetirement income is not taxed.Public PensionsRetirement income is not taxed. Property Taxes The median property tax on Florida's median home value of $159,000 is $1,686.Tax breaks for seniors: Florida residents ages 65 and older who meet certain income limits can receive an extra homestead exemption of up to $50,000 from some city and county governments and/or an exemption equal to the assessed value of the property, as long as the real estate has a fair market value of less than $250,000, the homeowner has maintained permanent residence at the location for at least 25 years, and household income does not exceed $28,841 in 2017. Any widow or widower who is a Florida resident may claim an additional $500 exemption. Inheritance and Estate Taxes There is no inheritance tax or estate tax.