Best States to Retire for Taxes (2026)
Where you retire can save — or cost — you thousands in taxes on retirement income. Nine states have no income tax at all, while others offer partial exemptions for Social Security, pensions, or military retirement. This guide ranks all 50 states by their tax-friendliness for retirees.
- Alaska ranks #1 with the lowest top tax rate at 0.00%.
- California ranks last at 13.30% — the highest among all states.
- The top 5 states are Alaska, Florida, Nevada, New Hampshire, South Dakota.
- All data is sourced from verified government databases and updated for 2026.
Top 3 States
All 50 States Ranked
Lowest to highest by top tax rate
| # | State | Top Tax Rate | Property Tax | Cost of Living | Homestead Exemption | Calculator |
|---|---|---|---|---|---|---|
| 1 | Alaska | 0.00% | 1.19% | 125.9 | $150,000 | Retirement Tax Calculator |
| 2 | Florida | 0.00% | 0.89% | 102.8 | $50,000 | Retirement Tax Calculator |
| 3 | Nevada | 0.00% | 0.60% | 104.2 | $605,000 | Retirement Tax Calculator |
| 4 | New Hampshire | 0.00% | 2.18% | 112.6 | $0 | Retirement Tax Calculator |
| 5 | South Dakota | 0.00% | 1.31% | 92.6 | $0 | Retirement Tax Calculator |
| 6 | Tennessee | 0.00% | 0.71% | 89.7 | $5,000 | Retirement Tax Calculator |
| 7 | Texas | 0.00% | 1.80% | 93.9 | $100,000 | Retirement Tax Calculator |
| 8 | Washington | 0.00% | 1.03% | 110.7 | $0 | Retirement Tax Calculator |
| 9 | Wyoming | 0.00% | 0.61% | 95.2 | $20,000 | Retirement Tax Calculator |
| 10 | North Dakota | 1.95% | 0.98% | 92.5 | $0 | Retirement Tax Calculator |
| 11 | Arizona | 2.50% | 0.62% | 102.2 | $0 | Retirement Tax Calculator |
| 12 | Indiana | 3.05% | 0.85% | 90.5 | $48,000 | Retirement Tax Calculator |
| 13 | Pennsylvania | 3.07% | 1.58% | 98.7 | $0 | Retirement Tax Calculator |
| 14 | Ohio | 3.50% | 1.56% | 90.8 | $26,200 | Retirement Tax Calculator |
| 15 | Iowa | 3.80% | 1.57% | 90.1 | $4,850 | Retirement Tax Calculator |
| 16 | Kentucky | 4.00% | 0.86% | 90.3 | $46,350 | Retirement Tax Calculator |
| 17 | Louisiana | 4.25% | 0.55% | 91.1 | $75,000 | Retirement Tax Calculator |
| 18 | Michigan | 4.25% | 1.54% | 91.4 | $0 | Retirement Tax Calculator |
| 19 | Arkansas | 4.40% | 0.62% | 89 | $0 | Retirement Tax Calculator |
| 20 | Colorado | 4.40% | 0.51% | 105.1 | $0 | Retirement Tax Calculator |
| 21 | North Carolina | 4.50% | 0.84% | 95.1 | $0 | Retirement Tax Calculator |
| 22 | Utah | 4.65% | 0.63% | 101.3 | $0 | Retirement Tax Calculator |
| 23 | Oklahoma | 4.75% | 0.90% | 86.6 | $1,000 | Retirement Tax Calculator |
| 24 | Missouri | 4.80% | 0.97% | 89.8 | $15,000 | Retirement Tax Calculator |
| 25 | Illinois | 4.95% | 2.27% | 96.4 | $10,000 | Retirement Tax Calculator |
| 26 | Alabama | 5.00% | 0.41% | 88.1 | $4,000 | Retirement Tax Calculator |
| 27 | Mississippi | 5.00% | 0.81% | 83.3 | $75,000 | Retirement Tax Calculator |
| 28 | West Virginia | 5.12% | 0.58% | 84.1 | $20,000 | Retirement Tax Calculator |
| 29 | Georgia | 5.49% | 0.92% | 93.4 | $2,000 | Retirement Tax Calculator |
| 30 | Kansas | 5.70% | 1.41% | 86.3 | $40,000 | Retirement Tax Calculator |
| 31 | Maryland | 5.75% | 1.09% | 115.4 | $0 | Retirement Tax Calculator |
| 32 | Virginia | 5.75% | 0.82% | 103.7 | $0 | Retirement Tax Calculator |
| 33 | Idaho | 5.80% | 0.69% | 97.7 | $125,000 | Retirement Tax Calculator |
| 34 | Nebraska | 5.84% | 1.73% | 90.8 | $0 | Retirement Tax Calculator |
| 35 | Montana | 5.90% | 0.84% | 101.6 | $250,000 | Retirement Tax Calculator |
| 36 | New Mexico | 5.90% | 0.80% | 94.6 | $0 | Retirement Tax Calculator |
| 37 | Rhode Island | 5.99% | 1.63% | 107.8 | $0 | Retirement Tax Calculator |
| 38 | South Carolina | 6.40% | 0.57% | 95 | $50,000 | Retirement Tax Calculator |
| 39 | Delaware | 6.60% | 0.57% | 101.5 | $0 | Retirement Tax Calculator |
| 40 | Connecticut | 6.99% | 2.14% | 112.8 | $0 | Retirement Tax Calculator |
| 41 | Maine | 7.15% | 1.36% | 109.4 | $25,000 | Retirement Tax Calculator |
| 42 | Wisconsin | 7.65% | 1.85% | 93.3 | $75,000 | Retirement Tax Calculator |
| 43 | Vermont | 8.75% | 1.90% | 114.5 | $0 | Retirement Tax Calculator |
| 44 | Massachusetts | 9.00% | 1.23% | 135 | $500,000 | Retirement Tax Calculator |
| 45 | Minnesota | 9.85% | 1.12% | 96.8 | $0 | Retirement Tax Calculator |
| 46 | Oregon | 9.90% | 0.97% | 113.1 | $0 | Retirement Tax Calculator |
| 47 | New Jersey | 10.75% | 2.49% | 115.2 | $0 | Retirement Tax Calculator |
| 48 | New York | 10.90% | 1.72% | 123.8 | $0 | Retirement Tax Calculator |
| 49 | Hawaii | 11.00% | 0.28% | 193.3 | $100,000 | Retirement Tax Calculator |
| 50 | California | 13.30% | 0.76% | 142.2 | $300,000 | Retirement Tax Calculator |
Methodology
How we collected and ranked the data
States are ranked by top marginal income tax rate (ascending), as retirees drawing from 401(k)s, IRAs, and pensions pay ordinary income tax rates. States with no income tax rank first. Property tax and homestead exemptions also affect retiree housing costs. Data from Tax Foundation, SSA, and IRS.
Frequently Asked Questions
Which states don't tax retirement income?
Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax, so all retirement income is state-tax-free. New Hampshire taxes only interest and dividends. Several other states exempt Social Security or offer pension exclusions.
Is Social Security taxed at the state level?
Most states do not tax Social Security benefits. As of 2026, only about 10 states tax Social Security income, and many of those offer partial exemptions for lower-income retirees. At the federal level, up to 85% of Social Security may be taxable depending on total income.