Tool | November 2017

State-by-State Guide to Taxes on Retirees


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The Bottom Line
Map of Mississippi

Most Tax-Friendly

One of Kiplinger's top ten most tax-friendly states for retirees, the Magnolia State offers a sweet income tax deal for retirees. It not only exempts Social Security benefits from state income taxes, but it also excludes all qualified retirement income. Remaining income is taxed at a maximum 5%. Mississippi is home to some of the cheapest property taxes in the nation. Seniors qualify for a homestead exemption on the first $75,000 of value.

State Sales Tax

7% state levy. Only two localties, Jackson (1%) and Tupelo (0.25%) add to that, making the average combined rate is 7.07%, according to the Tax Foundation. Groceries are fully taxable.

Income Tax Range

Low: 3% (on less than $5,000 of taxable income)

High: 5% (on more than $10,000 of taxable income)

Effective income tax rate: 4.6%/individual, 4.9%/joint

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Qualified retirement income -- including income from IRAs, 401(k)s, 403(b)s, Keoghs, and qualified public and private pension plans -- is exempt from state income tax. (Early distributions are not considered retirement income and may be subject to tax.) Interest income from federal securities and obligations of Mississippi and its political subdivisions are all exempt. Railroad Retirement benefits are not taxed.


Exempt from state income tax.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Exempt from state income tax.

Private Pensions

Exempt from state income tax.

Public Pensions

Exempt from state income tax.

Property Taxes

The state offers a homestead exemption of up to $300 for all eligible taxpayers. The median property tax on Mississippi's median home value of $104,000 is $854.

Tax breaks for seniors: For homeowners 65 and older or totally disabled, there is an exemption on the first $75,000 of value.

Inheritance and Estate Taxes

There is no inheritance tax or estate tax.