States That Won't Tax Your Social Security, 401(k), IRA, or Pension Income

Core Insights - The article discusses the tax implications of retirement income in the United States, highlighting that tax burdens vary significantly by state [1][2]. Taxation on Retirement Income - The amount paid in taxes on retirement income is largely influenced by the state of residence, with some states having more favorable tax laws for retirement income such as Social Security, retirement accounts, and pensions [2][5]. - Seven states do not tax certain forms of retirement income, including Social Security and pension distributions, with some states offering complete exemptions while others provide partial exemptions [4][6]. States with Favorable Tax Policies - States that do not impose income tax also exempt retirement income, with nine states currently having no income tax at all, benefiting retirees [5][7]. - Specific states with exemptions include: - Arkansas: Up to $6,000 exempt annually from IRA distributions and pension plans for those over 59 1/2 years old [6]. - Illinois: All forms of retirement income are exempt [6]. - Iowa: Exemptions for distributions from retirement accounts and pensions after age 55, with Social Security benefits exempt regardless of age [6]. - Mississippi: All retirement income is exempt, but early withdrawals are taxed as regular income [6]. - New Hampshire: Exemptions for Social Security and pension income, with phased-out taxation on interest or dividends from retirement accounts [6]. - Pennsylvania: All retirement income is exempt [6]. - South Carolina: Tax deductions available for retirement accounts and pensions, with varying limits based on age [6].