The states with no income tax

The federal government sees those distributions from pensions, 401(k)s and traditional IRAs as a form of income. In fact, according to the federal government, there’s no difference between those and the income you get from work.

Fortunately, eight states don’t have any kind of income tax, which means that their retirement benefits, such as Social Security, are untouched by the state taxman. These eight states are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

There’s also a ninth state, New Hampshire, but the difference with the latter one is that it has tax interest and dividends, which the majority of retirees still depend on for their retirement income.

Dorothy