Breaks on pensions
It seems that some states also offer breaks on pensions, as long as they’re not 401(k) or IRAs. Alabama has a total of 5 percent income tax, and income from pensions is usually exempt.
Income from defined contribution plans, like IRAs, isn’t completely exempt, but the good news: starting in 2023, there will be a $6,000 annual exemption. Hawaii has a whopping 11 percent top income tax but doesn’t have any tax pension distributions. You will have to pay taxes on your contributions, and any other gains from those contributions when you take the withdrawals.
As for other states, they seem to limit how much retirement income is taxable. For instance, Arkansas exempts $6,000 of private or public employee retirement income, but also all military and railroad retirement income.
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