Benjamin Franklin once remarked, “[I]n this world, nothing can be said to be certain, except death and taxes.” Yet, Franklin wasn’t entirely right – at least when it comes to tax obligations on retirement income.

If you are retired, whether or not you owe state taxes on your retirement income depends on your location. Here’s a list of 13 states that don’t tax Social Security, 401(k)s, individual retirement accounts (IRAs), or pension earnings.

States Without Income Tax

In some areas, you might not have to wait until retirement to avoid income taxes altogether. Nine states have no income tax at all:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

But there are a few caveats to consider in these states.

New Hampshire doesn’t have a state income tax; however, it does tax dividends and interest. Fortunately for retirees, this tax doesn’t apply to income derived from dividends and interest within an IRA or 401(k). Even better, these taxes are set to be phased out after 2024 in New Hampshire.

Also, Washington state does tax capital gains. While this may change next year, a recent initiative to remove these taxes was voted down.

States That Tax Income, But Not Retirement Income

The remaining states in the U.S. have income taxes, but four of them exempt retirement income from taxation, including funds received from Social Security, 401(k) plans, IRAs, and pensions:

• Illinois
• Iowa
• Mississippi
• Pennsylvania

However, timing could matter in some of these states. For example, in Mississippi, early withdrawals from retirement accounts may not be treated as retirement income and can incur taxes. Pennsylvania has similar tax implications for early distributions.

Alabama tax regulations apply to retirement income from 401(k)s and IRAs, but it does not tax Social Security benefits or pensions derived from defined benefit plans.

Hawaii does not tax distributions from private or public pension plans for retirees unless they made contributions themselves. For plans with employee contributions, taxes only apply to the portion of the increased value that can be attributed to those contributions.

States That Don’t Tax Social Security

If you are retired and live in states not covered earlier, you may have some good and bad news. The bad news is that you might have to pay state taxes on some of your retirement income.

On the positive side, many states exclude Social Security benefits from taxation. Below is a list of states (excluding the 13 previously mentioned that don’t tax any retirement income) that do not tax Social Security:

• Alabama
• Arizona
• Arkansas
• California
• Delaware
• Georgia
• Hawaii
• Idaho
• Indiana
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Missouri
• Nebraska
• New Jersey
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• South Carolina
• Virginia
• Wisconsin

While Taxes Can’t Be Avoided, They Come in Different Forms

Even if you move to a state with no taxes on retirement income, there will still be other taxes to consider. For instance, if you own property, you will owe property taxes, no matter which state you live in. Additionally, most places have sales taxes, with a few exceptions like Alaska, Delaware, Montana, New Hampshire, and Oregon.

Franklin’s words about the certainty of taxes still hold true today. Taxes are unavoidable; however, retirees can minimize their tax bills by carefully choosing their retirement destination.

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