Which States Let You Retire Without Paying State Taxes?

Some states exempt multiple forms of retirement income and several states have no income tax at all.Credit: whitebalance space / Getty Images Key Takeaways Forty-two states don't tax Social Security income. Thirty-seven states don’t tax most military retirement pay. Sixteen states exempt pension income from state taxes. Nine states have no income tax. This count includes Washington, which taxes high earners' capital gains only. After a lifetime of contributing to Social Security, building up a r ...