How can some states not tax retirement distributions while others do?
States end up making up a lot of their budget from taxes and while they do not tac retirement distributions they have other ways in which they calculate their tax revenue. When it comes to states that are rich in natural resources, these states can end up making up for the lack of retirement distribution tax and sometimes even income tax due to how many mineral rights sales they have!
In some states, such as Alaska, the state will not tax retirement distributions. Along with no income tax, other retirement benefits and even estates are exempt from taxes. To add to it, residents of Alaska also benefit from a one-time payment that comes from the oil industry in the area. For example, in 2022, the payment was $3,284 for each citizen of Alaska! This is part of what makes this state one of the ones that are considered by retirees as a new home!
In addition to Alaska, there are seven other states that do not have any income tax whatsoever, so you can rest assured that your retirement distributions will be safe from the taxman! While a lot of places will sing the praises of Florida, Texas, South Dakota, and Washington, just to name a few, we have decided to present to you the lesser-known states so you can have more of a choice pool if you are flirting with the idea of relocating!
Keep on reading to discover these states!
It would benefit my husband and myself to live elsewhere (we are in NJ) however have no desire to leave our family.