9 States with No Income Tax


Many states exempt some retirement income, but if you retire to one of these nine states, you dont have to do the math. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no income tax for any residents. For retirees, in particular, that means no state income tax on Social Security benefits, withdrawals from IRAs and 401(k)s, and payouts from pensions.

Be advised, though, that states still have to pay for roads and schools, so other taxes may be higher. Texas, for example, has some of the highest property taxes in the U.S. In addition, New Hampshire and Tennessee tax some dividends and interest, although Tennessee plans to phase out its tax by 2021.


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Kiplinger’s state-by-state guide to taxes on retirees is updated annually based on information from state tax departments, CCH and The Tax Foundation. All data are for the 2017 tax year unless otherwise noted.

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Slide Show 2 of 10 9 States with No Income Tax Alaska

   


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State Income Taxes: There is no state income tax in Alaska. Income from Social Security, IRAs, 401(k)s and other defined-contribution employer retirement plans, private pensions and public pensions are not taxed by the state.

Sales Tax: Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can go as high as 7.5%. But, the statewide average is only 1.76%.

Property Taxes: The median property tax on Alaska’s median home value of $250,000 is $2,956.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.


For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Alaska.

SEE ALSO: 15 Worst States to Live In During Retirement
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Slide Show 3 of 10 9 States with No Income Tax Florida

   


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State Income Taxes: There is no state income tax in Florida. Income from Social Security, IRAs, 401(k)s and other defined-contribution employer retirement plans, private pensions and public pensions are not taxed by the 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.

Property Taxes: The median property tax on Florida’s median home value of $159,000 is $1,686.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.


For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Florida.

SEE ALSO: 8 Things You Must Know About Retiring to Florida
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Slide Show 4 of 10 9 States with No Income Tax Nevada

   


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State Income Taxes: There is no state income tax in Nevada. Income from Social Security, IRAs, 401(k)s and other defined-contribution employer retirement plans, private pensions and public pensions are not taxed by the state.

Sales Tax: 5.5% state levy. Localities can add as much as 1.3%, and the average combined rate is 7.98%, according to the Tax Foundation.

Property Taxes: The median property tax on Nevada’s median home value of $192,100 is $1,420.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.


For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Nevada.

SEE ALSO: Retirement Planning Mistakes You’ll Regret Forever
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Slide Show 5 of 10 9 States with No Income Tax New Hampshire

   


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State Income Taxes: New Hampshire doesn’t have an income tax. But there’s a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers). Income from Social Security, IRAs, 401(k)s and other defined-contribution employer retirement plans, private pensions and public pensions are not taxed by the state.
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Slide Show 9 of 10 9 States with No Income Tax Washington

   


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State Income Taxes: There is no state income tax in Washington. Income from Social Security, IRAs, 401(k)s and other defined-contribution employer retirement plans, private pensions and public pensions are not taxed by the state.

Sales Tax: 6% state levy. Municipalities can add up to 3.4% to that, with the average combined rate at 8.92%, according to the Tax Foundation.

Property Taxes: The median property tax on Washington’s median home value of $266,200 is $2,798.

Inheritance and Estate Taxes: An estate tax is imposed on estates exceeding $2.129 million. Rates range from 10% to 20%. Washington offers an additional $2.5 million deduction for family-owned businesses valued at less than $6 million. There is no inheritance tax.


For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Washington state.

SEE ALSO: 7 Ways to Maximize Medicare Benefits
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Slide Show Start Over | Next Slide Show13 States That Tax Social Security Benefits 9 States with No Income Tax Wyoming

   


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State Income Taxes: There is no state income tax in Wyoming. Income from Social Security, IRAs, 401(k)s and other defined-contribution employer retirement plans, private pensions and public pensions are not taxed by the state.

Sales Tax: 4.5% state levy. Localities can add as much as 2.0%, and the average combined rate is 5.42%, according to the Tax Foundation.

Property Taxes: The median property tax on Wyoming’s median home value of $201,000 is $1,206.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Wyoming.

SEE ALSO: Great Places to Retire in All 50 States
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