There are also three other states with income taxes that give retirees a well-deserved break on pensions and retirement plan distributions. For instance, Illinois has a 4.95 percent flat income tax, and it won’t tax distributions from the majority of pensions and 401(k) plans, but also IRAs.
Also, Mississippi’s maximum state tax is 5%, and it doesn’t tax any retirement distribution, while Pennsylvania has a 3.07 percent flat tax, and doesn’t tax retirement plans at all.
When it comes to other states, it seems that the next best thing is carving out a couple of exemptions for retirement income. For instance, besides those nine states that don’t have any income tax, it seems that no less than 21 states don’t apply any kind of tax on military pay.
These states are Alabama, Arkansas, Connecticut, Hawaii (who would’ve thought?), Illinois, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota (everyone expected this from Minnesota!), Mississippi, Missouri, New Jersey, and New York (as expensive as this state is, the least they could do was to exempt military tax), North Dakota, Ohio, Pennsylvania, but also West Virginia, and Wisconsin.
Why can’t Virginia be one of the; NO TAX STATE!!! Is it because it’s so close to D.C.???
Well arkansas and irs taxed the hell out of my 401k…that’s a dmn shame we think that we are saving up for retirement and have nothing more when we retire plus social security don’t want to give us nothing want us too work until we are 70 to get full money we have worked for all our lives 🙄😬😬the government is a joke but the rich gets everything and poor gets nothing….and they do all the damn work…whyyyyy
We moved from Massachusetts to North Carolina about 20 years ago. NC taxed my husbands pension. I had been on disability in MA, I lost it when I moved to NC. I now live in PA and pension is not taxed but I never got my disability back. We lost a lot of money. NO state should tax someone’s pension or SS or disability.
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Arizona doesn’t tax military pensions