Your retirement distributions won't be taxed in these states: AARP

Your retirement distributions won't be taxed in these states: AARP
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you want to make your retirement savings last even longer, it could be worth moving to a state that won’t tax your retirement distributions.” data-reactid=”12″>If you want to make your retirement savings last even longer, it could be worth moving to a state that won’t tax your retirement distributions.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="There are 12 states that won’t tax your distributions from 401(k) plans, IRAs or pensions, according to a recent report from AARP.” data-reactid=”13″>There are 12 states that won’t tax your distributions from 401(k) plans, IRAs or pensions, according to a recent report from AARP.

Of those states, nine — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — don’t have state income taxes.

Meanwhile, Illinois, Mississippi and Pennsylvania don’t tax retirement distributions, AARP reported.

According to the nonprofit, pensions aren’t taxed in Alabama or Hawaii, but those states do have taxes on 401(k) and IRA distributions.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Some states only partially tax retirement distributions, AARP reported. In Colorado, taxpayers over 65 can remove $24,000 from their federal AGI for their state taxes, according to AARP.” data-reactid=”22″>Some states only partially tax retirement distributions, AARP reported. In Colorado, taxpayers over 65 can remove $24,000 from their federal AGI for their state taxes, according to AARP.

Other states have policies for taxes on retirement distributions that depend on your occupation before retirement. For example, in Connecticut, teachers can subtract 25 percent of their retirement income from federal AGI.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="There are also 29 states that don’t tax military retirement income at all, AARP reported. Those states include Alabama, Arkansas, Connecticut, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maine, Massachusetts, Missouri, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, West Virginia and Wisconsin.” data-reactid=”25″>There are also 29 states that don’t tax military retirement income at all, AARP reported. Those states include Alabama, Arkansas, Connecticut, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maine, Massachusetts, Missouri, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, West Virginia and Wisconsin.

The remaining 21 states tax some or all of military retirement income, according to AARP.

One exception is in Virginia, where only recipients of the Congressional Medal of Honor are exempt from taxes on their military retirement income, AARP reported.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But if your state has low income taxes,&nbsp;other taxes, like property or sales tax,&nbsp;might be higher, according to AARP.” data-reactid=”29″>But if your state has low income taxes, other taxes, like property or sales tax, might be higher, according to AARP.

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