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Home›Taxes›7 States That Do NOT Tax Retirement Income

7 States That Do NOT Tax Retirement Income

By Our Editorial Team  |  Published October 24, 2022

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Our editorial team verifies all financial and lifestyle information for accuracy and relevance to senior living.

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Illinois

Surprisingly, while Illinois has a pretty good retirement income tax policy when compared to the other Midwest states, it is also one of the least friendly for retirees when we talk about taxes as a whole. Despite this, they will not be taxing your IRA, pension, 401(k), or social security benefit payments at all, except in the cases when the pension or 401(k) is not coming from an employee benefit plan.

Otherwise, Illinois has a flat rate tax on their income of 4.95%, which is still fairly low when compared to other states, and the only time they perceive estate taxes is for those that go over a perceived value of $4 million.

It may not be the best choice for someone that’s moving in order to lessen the tax burden, but if you have been living here all your life, we see no reason for which you would want to move when it comes to retirement income tax.

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18 responses to “7 States That Do NOT Tax Retirement Income”

  1. Darcy Buster says:
    January 21, 2023 at 6:05 am

    So much more needs to be considered when deciding where to retire. I have noticed a huge disparity in property taxes from state to state & sometimes towns or counties within the state. Maybe you’re not being taxed on retirement income but would pay a premium on property taxes & medical expenses etc. For example, Florida has no income tax but their property taxes are quite high as are condo dues if you’re living in an HOA. Do your research!

    Reply
    • robert says:
      February 4, 2025 at 7:54 pm

      excellent statement !

      Reply
  2. Jesse Tynes says:
    February 1, 2023 at 2:45 pm

    So, if the only income you’ve only received in 2022 was income for SNAP food services, must that be an actual income?

    Reply
  3. Jim says:
    February 1, 2023 at 4:16 pm

    This would be a good article if a person did not have to click through page after page. This all could have fit on one page.

    Reply
    • Jane Kane says:
      May 24, 2024 at 7:18 pm

      Agree with Jim

      Reply
      • Christy Holt says:
        August 25, 2024 at 7:50 pm

        These ads are a drag….

        Reply
    • Dawn Marie Overton says:
      April 23, 2026 at 4:33 pm

      Agreed

      Reply
  4. Pat Duskin says:
    February 1, 2023 at 5:37 pm

    Wow…Texas?

    Reply
    • Michael Wisley says:
      August 25, 2023 at 2:57 pm

      Very very high real estate taxes

      Reply
      • Jane Kane says:
        May 24, 2024 at 7:16 pm

        No if you’re 65 or older.

        Reply
  5. Larry r teague says:
    February 2, 2023 at 1:08 am

    thanks for the information it is very useful

    Reply
  6. Larry Hartke says:
    February 10, 2023 at 7:16 pm

    What about Kansas?

    Reply
  7. Sharon Lott says:
    February 16, 2023 at 1:34 pm

    I thought Florida was one of the states that didn’t tax seniors

    Reply
    • April Y Mimnaugh says:
      July 7, 2023 at 11:20 am

      Good to know.

      Reply
    • POW says:
      May 23, 2024 at 11:18 am

      Well you are wrong. Florida texes is high.

      Reply
  8. Maureen Raye says:
    May 27, 2024 at 5:21 pm

    I live in California and I do not pay taxes on my social security. Why wasn’t it included in this article?

    Reply
  9. Leslie Kalei Fong says:
    August 24, 2024 at 6:07 pm

    True, CA does not tax social security retirement benefits, but does tax pensions, 401s and IRAs as high as 13%. Also, CA taxes military retirement income. CA has very high real property taxes too. I lived in CA 22 years, but left in 2018 when I retired.

    Reply
  10. LynnC says:
    August 25, 2024 at 7:59 pm

    I live in Tennessee – we have no state tax on income, social security or otherwise?

    Reply

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