State-by-State Retirement Income Tax Map for 2026

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Retirement Planning

Why Retirement Tax Planning Matters More Than Ever

As retirement approaches, taxes often become one of the largest and most misunderstood threats to long-term financial security. Many retirees focus on investment returns, Social Security timing, or healthcare costs, yet overlook how state taxes can quietly erode retirement income year after year. Where you live in retirement can significantly affect how much of your Social Security, pension income, and retirement account withdrawals you actually keep. With rising budget pressures at the state level and evolving tax laws, understanding the retirement income tax landscape heading into 2026 is essential. Proactive tax planning allows retirees and pre-retirees to reduce unnecessary taxes, create more predictable cash flow, and preserve wealth for future generations. This guide provides a clear, state-by-state overview of how retirement income is taxed in 2026, helping you make informed decisions about where and how to retire.

Visual Chart: State-by-State Retirement Income Tax Overview for 2026

Below is a high-level snapshot of how all 50 states treat retirement income. Keep in mind that individual circumstances matter, and local taxes or income thresholds can further affect outcomes.

State State Income Tax Social Security Taxed Pension and Retirement Income
Alabama Yes No Exempt
Alaska No No No state income tax
Arizona Yes No Partial exemption
Arkansas Yes No Partial exemption
California Yes No Fully taxed
Colorado Yes No Partial exemption
Connecticut Yes Partial Partial exemption
Delaware Yes No Partial exemption
Florida No No No state income tax
Georgia Yes No Large retirement exclusion
Hawaii Yes No Pensions largely exempt
Idaho Yes No Partial exemption
Illinois Yes No Fully exempt
Indiana Yes No Partial exemption
Iowa Yes No Mostly exempt
Kansas Yes No Fully taxed
Kentucky Yes No Partial exemption
Louisiana Yes No Partial exemption
Maine Yes Partial Partial exemption
Maryland Yes No Partial exemption
Massachusetts Yes No Most pensions exempt
Michigan Yes No Partial exemption
Minnesota Yes Partial Partial exemption
Mississippi Yes No Fully exempt
Missouri Yes No Partial exemption
Montana Yes Partial Partial exemption
Nebraska Yes Partial Partial exemption
Nevada No No No state income tax
New Hampshire No earned income tax No Limited interest tax
New Jersey Yes No Mostly exempt
New Mexico Yes Partial Partial exemption
New York Yes No Partial exemption
North Carolina Yes No Fully taxed
North Dakota Yes No Partial exemption
Ohio Yes No Partial exemption
Oklahoma Yes No Partial exemption
Oregon Yes No Fully taxed
Pennsylvania Yes No Fully exempt
Rhode Island Yes Partial Partial exemption
South Carolina Yes No Partial exemption
South Dakota No No No state income tax
Tennessee No No No state income tax
Texas No No No state income tax
Utah Yes Partial Partial credit
Vermont Yes Partial Fully taxed
Virginia Yes No Partial exemption
Washington No No No state income tax
West Virginia Yes No Exempt or phasing out
Wisconsin Yes Partial Partial exemption
Wyoming No No No state income tax

States With No State Income Tax

Several states continue to attract retirees because they impose no state income tax at all. In these states, Social Security, pensions, and retirement account withdrawals are not taxed at the state level.

States with no income tax include:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

New Hampshire is unique because it does not tax earned income but does tax certain interest and dividend income, although that tax is scheduled to phase out completely by 2027. For retirees who rely primarily on Social Security and retirement accounts rather than taxable investments, these states can offer meaningful tax savings. However, property taxes, sales taxes, and the cost of living should also be evaluated before relocating.

States With Partial Retirement Tax Exemptions

The majority of states fall into this middle category. These states may exempt Social Security income, allow deductions or credits for pensions, or provide age-based exclusions. The complexity of these rules makes tax planning especially important.

Common partial exemption structures include:

  • Income thresholds that determine whether Social Security is taxed
  • Fixed dollar exemptions for pension or retirement income
  • Age-based exclusions for taxpayers over a certain age
  • Credits that reduce, but do not eliminate, tax liability

States such as Georgia, South Carolina, and Arizona are often considered retirement-friendly because they offer generous retirement income exclusions while still maintaining a state income tax. Others, like Connecticut and Minnesota, apply more restrictive income-based rules that require careful planning to minimize exposure.

States That Tax Most or All Retirement Income

A smaller group of states generally taxes retirement income similarly to wages, although Social Security is often still exempt.

States known for taxing most retirement income include:

  • California
  • Kansas
  • North Carolina
  • Oregon
  • Vermont

While these states may offer other lifestyle or family advantages, retirees should be aware that higher state tax burdens can significantly reduce after-tax income. Strategic withdrawal planning, Roth conversions, and timing of income sources can help offset some of these effects.

State-by-State Retirement Income Tax Notes for 2026

Alabama exempts Social Security and most pension income, making it highly favorable for retirees.
Alaska has no state income tax and no tax on retirement income.
Arizona exempts Social Security and allows a partial pension exclusion.
Arkansas exempts Social Security and provides a retirement income exclusion up to a set limit.
California does not tax Social Security, but fully taxes pensions and retirement account withdrawals.
Colorado exempts Social Security and allows age-based retirement income deductions.
Connecticut exempts Social Security for many retirees based on income and allows partial pension exemptions.
Delaware exempts Social Security and provides a retirement income exclusion for those over age 60.
Florida has no state income tax.
Georgia offers one of the largest retirement income exclusions in the country for residents over age 62.
Hawaii exempts Social Security and most public pensions while partially taxing private pensions.
Idaho exempts Social Security and provides limited pension deductions.
Illinois fully exempts Social Security, pensions, and retirement income.
Indiana exempts Social Security and allows some pension exclusions.
Iowa has eliminated tax on most retirement income for qualifying residents.
Kansas exempts Social Security but taxes other retirement income.
Kentucky exempts Social Security and provides a retirement income exclusion.
Louisiana exempts Social Security and offers limited pension exemptions.
Maine partially taxes Social Security and provides a pension income deduction.
Maryland exempts Social Security and allows retirement income exclusions based on age and income.
Massachusetts exempts Social Security and most public pensions.
Michigan exempts Social Security and allows phased-in pension exemptions.
Minnesota partially taxes Social Security and allows limited pension deductions.
Mississippi fully exempts Social Security and retirement income.
Missouri exempts Social Security and offers pension exemptions based on income.
Montana partially taxes Social Security and retirement income.
Nebraska partially taxes Social Security and provides retirement income credits.
Nevada has no state income tax.
New Hampshire does not tax wages or Social Security, and is phasing out investment income taxes.
New Jersey exempts Social Security and allows large pension exclusions.
New Mexico partially taxes Social Security and retirement income with deductions.
New York exempts Social Security and provides a pension exclusion.
North Carolina exempts Social Security but taxes other retirement income.
North Dakota exempts Social Security and provides retirement income deductions.
Ohio exempts Social Security and offers modest pension credits.
Oklahoma exempts Social Security and allows limited retirement deductions.
Oregon exempts Social Security but taxes most other retirement income.
Pennsylvania exempts Social Security and all retirement income.
Rhode Island partially taxes Social Security and offers limited pension exemptions.
South Carolina exempts Social Security and offers generous retirement income deductions.
South Dakota has no state income tax.
Tennessee has no state income tax.
Texas has no state income tax.
Utah partially taxes Social Security and offers a retirement credit.
Vermont partially taxes Social Security and fully taxes pensions.
Virginia exempts Social Security and offers limited retirement deductions.
Washington has no state income tax.
West Virginia exempts Social Security and is phasing out taxes on other retirement income.
Wisconsin partially taxes Social Security and provides limited retirement income exclusions.
Wyoming has no state income tax.

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Understanding how retirement income is taxed on a state-by-state basis is one of the most powerful planning tools available to retirees and those nearing retirement. Taxes do not have to be a guessing game, and with the right strategy, you can often reduce lifetime tax exposure without sacrificing lifestyle or flexibility. At Protect and Preserve Inc., we go beyond investments. We help you connect the dots across your financial world, bringing together wealth management, tax strategies, risk planning, legal services, and business advice into a clear, proactive roadmap. With a focus on retirement planning, legacy protection, and financial peace of mind, we are proud to serve clients across the region, both in person and virtually. If you are ready to take the stress out of managing your financial future, reach out today to schedule your complimentary consultation. Let us help you protect what you have built and preserve what matters most.