Where Retirement Income Is Actually Taxed

"Which states don't tax retirement income?" is the wrong question, because most states answer it with an asterisk. A handful levy no income tax at all. Many exempt pension income only up to a dollar cap, or only above an age. And a distinct group draws a line most retirees never see coming: they exempt a government pension in full, tax a private pension differently, and tax an IRA or 401(k) withdrawal as ordinary income — three different bills on the same amount of money. This study groups all 51 jurisdictions by how they actually treat retirement income in 2026, and shows the exclusion in dollars, computed straight from the same engine that powers the QuantCalc planner.

The full map (51 jurisdictions)

Click any column to sort. The last three columns are the 2026 state income tax on $75,000 of retirement income for a single filer aged 67, computed three ways by source — a public (government) pension, a private employer pension, and an IRA/401(k) distribution — through the engine's compute_state_tax_v4. Where the three differ, the source changes the tax; where they match, only the amount and the state matter. "Exclusion cap" is the state's dedicated retirement-income exclusion for a single filer (— means none or a different mechanism, described below).

CC-BY-4.0 — free for any use including republication and journalism, with attribution to QuantCalc Research.

When the source of the pension changes the tax

For most states, a pension and an IRA withdrawal of the same size are taxed identically. For these 7, they are not — the table shows the 2026 single-filer tax on $75,000 by source (age 67):

How each state treats retirement income

Every jurisdiction falls into one of the groups below. The description of each group was verified against the code the compiled engine actually runs, not against comments — the exact functions are named in the methodology.

No state income tax (9)

No state income tax at all — pensions, IRA and 401(k) distributions, and Roth conversions are untaxed at the state level.

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.

Full pension + IRA exclusion (4)

Qualified pension AND IRA/401(k) distributions are fully excluded from the state base at qualifying age — the source of the money does not matter.

Illinois, Iowa, Mississippi, Pennsylvania.

Employer/DB pension exempt, IRA taxed (1)

Employer / defined-benefit pension income — public or private — is fully exempt, but IRA and 401(k) distributions remain taxable, so the income SOURCE is decisive.

Alabama.

Government pension exempt (no cap) (3)

Government / public-employer pension income is fully exempt with no dollar cap; private pensions and IRA/401(k) distributions get a smaller capped exclusion (or none).

Hawaii, Kansas, New York.

Government pension exempt up to a cap (1)

Government / public pension income is exempt up to a per-taxpayer cap; private pensions and IRA/401(k) distributions do not get that carve-out.

Missouri.

Capped exclusion, pension-sourced only (2)

A capped exclusion that draws only on pension/annuity dollars; the IRA/401(k) remainder is fully taxable.

Maryland, Rhode Island.

Pension/annuity subtraction, shared with SS (1)

Pension and annuity income is subtracted up to an age-tiered cap that is shared with — and reduced by — the Social Security subtraction.

Colorado.

Pension deduction phases down by income (1)

Pension and IRA distributions get a percentage deduction that phases down as AGI rises.

Connecticut.

Capped exclusion (pension + IRA) (11)

A capped retirement-income exclusion applies to pension and IRA distributions alike at qualifying age; several of these states phase the cap out as income rises.

Arkansas, Delaware, Georgia, Kentucky, Louisiana, Maine, Michigan, New Jersey, Oklahoma, Virginia, Wisconsin.

General age-65+ subtraction (4)

A general age-65+ subtraction reduces the state base; it is not specific to pension source, and does not fully exempt retirement income.

Indiana, Montana, South Carolina, West Virginia.

Taxed as ordinary income (14)

Retirement distributions are taxed as ordinary income with no dedicated pension/IRA exclusion (the ordinary standard deduction still applies).

Arizona, California, District of Columbia, Idaho, Massachusetts, Minnesota, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Utah, Vermont.

Methodology

Changelog

• v2026.1 — initial release. 51 jurisdictions grouped into 11 treatment categories, with source-typed $30k/$75k exclusion-dollar illustrations, generated from the frozen state-tax engine via authority_dump --policy and --pension-illustrate.

License: CC-BY-4.0. QuantCalc is an independent retirement-planning research project. Not affiliated with, endorsed by, or sponsored by any state or federal agency. Not financial, tax, or legal advice.

@misc{quantcalc2026statepensionexclusionmap2026,
  title  = {State Pension-Exclusion Map 2026},
  author = {{QuantCalc Research}},
  year   = {2026},
  url    = {https://quantcalc.app/research/state-pension-exclusions-2026/},
  note   = {Accessed <date>}
}