Which states tax retirement income? What the same retired couple pays in 11 states.

The same retirement can cost very different amounts in state income tax, and the difference has little to do with how much you saved. It comes from three rules that each state sets for itself: whether it taxes withdrawals from an IRA, 401(k) or pension, whether it taxes Social Security, and what its brackets and deductions are. I put one couple through Runway's engine in eleven states to show what that adds up to, and I read the rules from the states' own tax pages where I could.

Which states have no income tax on retirement income?

Eight: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming have no broad individual income tax, per the Tax Foundation's 2026 state rate table. Washington taxes only large capital gains, 7% above a $278,000 deduction in the 2025 figures, so wages, pensions and IRA withdrawals are untouched. A few states have an income tax but exempt most retirement income: Pennsylvania, Illinois, Mississippi and, from age 55, Iowa. The catch in Pennsylvania is age. The Pennsylvania Department of Revenue says that for an IRA, a distribution after 59½ is exempt "so long as the taxpayer is not required to pay a penalty for early withdrawal," and that a premature withdrawal is taxable. That matters if you retire at 57 and draw on an IRA.

Which states tax Social Security benefits?

Eight states still tax some of it in 2026, according to published state-by-state guides such as Kiplinger's: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. Most of them tax it only above an income line. Connecticut's Department of Revenue Services says single filers with federal adjusted gross income under $75,000, and joint filers under $100,000, owe no Connecticut tax on benefits, and anyone above those lines completes a worksheet. Minnesota's Department of Revenue subtracts benefits up to $86,410 of income single and $110,780 joint in 2026, then phases the subtraction out by 10% for each $4,000 over. West Virginia finished phasing its tax out for 2026. The other states leave Social Security out entirely, and the federal tax on it is a separate question, which IRS Publication 915 explains.

What does a retired couple pay in each state?

Take Pat and Alex, both 67 and married filing jointly, with a pension, IRA withdrawals and Social Security. In the first year below their adjusted gross income is $87,350, which includes $32,350 of Social Security that is taxable, and the federal tax is $5,726. In the second, adjusted gross income is $182,500, with $42,500 of taxable Social Security and $21,764 of federal tax. The figures are the state income tax alone:

The pattern is the useful part. In the lower-income year nearly every state taxes nothing, because most of them exclude retirement income up to a generous amount or leave it under their deductions. Minnesota is the exception since it has no exclusion for IRA or pension income at all. In the higher-income year the answer splits. Pennsylvania, Illinois, Michigan and Georgia still tax nothing, since their exclusions are large or unlimited. New Jersey's exclusion steps down as income rises and ends above $150,000, and the New Jersey Division of Taxation's test is "Your total income for the entire year was $150,000 or less." This couple's $140,000 counts as total income there, since New Jersey leaves Social Security out, so they keep only a quarter of the exclusion and owe tax on the rest. South Carolina, New York, Connecticut and California all start to bite, and Minnesota, which also taxes most of the Social Security once income is far enough over its line, is the highest.

How do the retirement income exclusions differ?

They are different kinds of rule, which is why you cannot guess a state's tax from its top rate. Some exempt everything, some exempt a fixed amount per person, some exempt an amount that shrinks as your income rises, and some exempt nothing. New York, for example, gives each spouse their own $20,000, and its Tax Department says "you cannot claim any unused portion of your spouse's exclusion." Georgia's exclusion begins at 62, and its Department of Revenue says taxpayers "who are 62 or older" may be eligible. The table lists what Runway's engine uses for each state in the comparison and the page each rule comes from.

How much more tax does a state add over a whole retirement?

One year is a sketch. The better question is what the state adds over thirty years, when withdrawals, required distributions and Social Security all change. I ran a plan for Pat (65, plan to 92) and Alex (63, plan to 95): $1,410,000 in cash, a brokerage account, two traditional IRAs and a Roth IRA, $85,000 a year of spending, Social Security claimed at 67, and a $20,000 pension that does not rise with inflation. Then I ran it again with each state selected and compared lifetime tax and the balance left at 95 with the same plan in a state with no income tax. The balances are in today's dollars:

The ending balance falls by more than the extra tax because tax paid early is money that stops growing. Pennsylvania and Illinois cost this couple about $1,206 and $1,034 over the whole plan, which comes from the gains in the brokerage account, the one kind of income in this plan that both states tax. At the other end Minnesota adds $170,307 and Connecticut $96,806. It is one household with one set of assumptions, so treat the ranking as an illustration: a couple with less in IRAs, a bigger pension or different ages would see a different order.

What should I do with this if I am choosing where to retire?

Three things follow from the numbers. First, a state's top rate says very little: California's rates are among the highest and it taxed the lower-income year at $45, while Minnesota's top rate is lower than California's and it taxed that year at $1,305. Second, the mix of your income matters more than the total. Roth withdrawals, Social Security and, in some states, pension income, are treated very differently from IRA withdrawals, which is one more reason the order you draw accounts in is a state-tax question as well as a federal one. Third, local taxes can add a lot: Indiana, Maryland, Ohio, Kentucky, Pennsylvania and New York City all have them, and the comparison above leaves them out.

In Runway you choose your state on the Basics step, and it is free. The plan then uses that state's rules for every year, including the years you convert to Roth, and a note under the picker says in plain words what is modeled for your state and when the rules were last checked. You can add a county or city income tax rate yourself. If you are weighing a move, run the same plan twice and compare, or use the Roth conversion guide to see how a state changes the price of converting.

What does this leave out?

• High-income phase-outs and credits. Many states reduce their deductions, exemptions and credits as income rises, and some give credits for property tax or low income. Those are not modeled, except Connecticut's personal exemption.
• Local income taxes are included only if you enter a rate. Estate and inheritance taxes are separate.
• The split of income types. The engine tells pension income from IRA and 401(k) withdrawals, but not public pensions from private ones, and it does not separate the employer-funded part of a rolled-over IRA (Hawaii cares about that).
• The rules change every year, and several states cut rates for 2026. I read them in October 2026, from each state's own pages where possible and otherwise from published state-by-state guides, and they should be rechecked every January.
• One person's numbers. This is an illustration for one couple, not advice on where to live. Taxes are one reason among many.

How were these numbers calculated?

• One year: Runway's tax calculation for a couple married filing jointly, both 67 (so the federal standard deduction includes the extra amount for age 65 and over), 2026 federal brackets, and the state's own rules as above. Federal taxable Social Security comes from the IRS provisional-income worksheet. The state figure is the state tax alone.
• Whole plan: Runway's engine, one deterministic run with expected average returns, 2.5% inflation, the withdrawal order the planner uses, and the rules for the state selected. Extra tax is the plan's lifetime tax with the state minus the same plan with no state tax. Marketplace health costs and Medicare are included in both.
• Where the rules come from: the pages linked in the table for the ten states, the Tax Foundation's 2026 table for brackets and deductions, and published state-by-state retirement guides for some partial exclusions. The verification page shows a sample of the state rules checked against hand calculations, with the limits of what has been checked.
• As of: October 28, 2026.

Frequently asked questions

Which states have no income tax on retirement income?

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming have no broad income tax. Washington taxes only large capital gains. Pennsylvania, Illinois, Mississippi and, from age 55, Iowa have an income tax but exempt retirement income, though the age at which IRA withdrawals count as retirement income differs.

Which states tax Social Security benefits?

Published state-by-state guides list eight in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont, most of them only above an income line. West Virginia finished phasing its tax out for 2026. Every other state leaves Social Security out of its tax.

Does Pennsylvania tax IRA withdrawals?

Not once the withdrawals count as retirement income. For an IRA, which has no plan retirement age, the department looks at whether the distribution would carry the federal early-withdrawal penalty, such as before age 59½. The engine treats IRA withdrawals as exempt from 59½ and taxes them before, and the same applies to Roth conversions, which are taxed in the year of the conversion.

Does Runway include state tax?

Yes, for all 50 states and the District of Columbia, and it is free. Choose your state on the Basics step: Runway then uses that state's brackets, standard deduction and exemptions, its treatment of Social Security, and its exclusions for pension income and IRA or 401(k) withdrawals, and a note under the picker says what is and is not modeled for your state. You can add a county or city income tax rate yourself.

How accurate are the state figures?

They are planning estimates. The rules were read in October 2026 from state announcements and published state-by-state guides, and a sample of them is checked against hand calculations on the verification page. They leave out phase-outs of deductions at high income, state credits and the details of some partial exclusions, so check your own state's current instructions or a tax professional before relying on one.