#3 New York

The state income tax ranges from 4% to 10.9%. The 4% applies to married couples that are filing jointly and have a taxable income of a maximum of $17,150 or to married individuals that are filing separately and individual filers that have a taxable income of a maximum of $8,500. The 10.9% applies to taxable income above $25 million.

In comparison to other states, New York’s income tax burden on regular retirees is less harsh. Military retirement income, Social Security benefits, and pensions from the federal and New York governments are all exempt.

But anything from a private retirement account (including pensions, IRAs, and 401(k) plans) or an out-of-state government plan that exceeds $20,000 is subject to taxation. New York’s income tax rates are quite high for extremely rich retirees, but they will begin to decline in a few years. The highest rate will decrease from 10.9% to 8.82% starting in 2028.