20 States Offering Tax Breaks for Retirees
Many U.S. states provide tax breaks to retirees to attract and retain senior citizens. These tax advantages can vary, from exclusions on retirement income to reduced property taxes.
- Tricia Quitales
- 6 min read
Some states provide tax reductions meant to help seniors as retirees seek to increase their income and lower living costs. These breaks could be exclusions on property taxes, Social Security income, and pensions, so helping to make retirement more affordable in some areas. Although not all states provide the same degree of tax relief, those that do can greatly affect the living standards of seniors. Here, we’ll look at 20 states that provide tax breaks for seniors.
1. Florida
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Florida has no state income tax, making it a top pick for retirees. This means pensions, Social Security, and retirement funds are untaxed. The state also provides certain property tax exemptions for seniors, appealing to older homeowners. Many retirees believe Florida’s tax rules enable them to retain more of their retirement income.
2. Texas
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Texas, like Florida, offers a major benefit for retirees by not levying a state income tax. State taxes do not apply to retirement savings, pension income, or Social Security payments. Texas also provides different property tax exclusions and deductions, which help seniors on set incomes.
3. Wyoming
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With no state income tax, Wyoming is another tax-friendly state for retirees. Retirement savings, pensions, and Social Security income are tax-free in Wyoming. The state also offers seniors alternatives for property tax relief, which helps to attract people wanting to maintain low living expenses.
4. Nevada
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Nevada provides tax advantages to retirees by not taxing Social Security benefits, pensions, or other kinds of retirement income. The state also has no state income tax, which helps seniors extend their retirement funds even more. Relatively low property taxes in Nevada also give retirees more savings.
5. Tennessee
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Tennessee’s lack of state income tax is especially advantageous depending on Social Security, pensions, and retirement accounts. Though it taxes dividends and interest, this is less of a worry for seniors on set incomes. Seniors in some regions may also qualify for property tax exemptions.
6. South Dakota
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South Dakota is an excellent choice as it does not tax retirement income or Social Security benefits. There is no state income tax, and property taxes are rather modest. South Dakota’s tax laws enable seniors to retain more income and lower general living expenses.
7. Alaska
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Among the tax advantages Alaska provides for retirees is no state income tax. Alaska does not tax pensions or Social Security payments, so retirees may retain more of their money. Eligible seniors are also exempt from property taxes in the state, which helps to draw older homeowners.
8. Montana
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Montana does not tax Social Security income and provides a notable tax reduction for pension income for retirees. Seniors with low income may get a property tax credit from the state, which helps to lower their total tax load. Although Montana has a state income tax, its tax advantages for seniors could help to offset the cost of living there.
9. Mississippi
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Known for its tax benefits for retirees, Mississippi provides exemptions on most pensions and Social Security income. The state also offers seniors property tax relief, lowering their living costs. Mississippi’s tax policies rank among the cheapest in the Southeast for retirees.
10. Arizona
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Arizona offers retirees tax breaks by exempting Social Security payments. The state provides deductions on retirement income, including 401(k) distributions and pensions. Seniors in Arizona also qualify for property tax exemptions, which help lower their living expenses.
11. Georgia
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Georgia exempts up to $65,000 of retirement income for people over 65, giving seniors a significant tax benefit. There is no tax on Social Security payments. Georgia also offers seniors property tax exclusions, which helps to make it a desirable state for those wanting to conserve money.
12. North Carolina
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For retirees, North Carolina’s exemption of Social Security payments from state income tax could be beneficial. The state also provides deductions for other retirement income, including pensions. Senior homeowners can qualify for property tax exemptions, which helps to lower their financial load even more.
13. Kentucky
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Kentucky taxes no Social Security income; retirees may deduct up to $41,110 of pension income. The state provides seniors with several property tax exemptions and credits. Kentucky’s tax rules are meant to enable seniors to maintain comfortable living without being too burdensome.
14. Oklahoma
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Oklahoma gives retirees a major tax break by exempting up to $75,000 of pension income for people over 65. The state also does not tax Social Security income and offers several senior-specific property tax relief initiatives that can help lower general living expenses.
15. Louisiana
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Louisiana provides tax relief for retirement income, including pensions and 401(k)s, and excludes Social Security income. Seniors in the state are also exempt from property taxes, which can greatly reduce housing expenses. Louisiana’s tax laws attract retirees looking for financial relief.
16. Arkansas
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Arkansas offers seniors tax relief by exempting up to $6,000. Seniors on fixed incomes also benefit from Social Security payments as they are untaxed. Arkansas also provides qualifying seniors with property tax relief, lowering their tax load even more.
17. Delaware
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Delaware is famous for its retiree-friendly tax policies, which include exemptions on Social Security income and up to $12,500 of pension income. The state’s lack of sales tax on food or prescription drugs helps seniors save on daily costs. Delaware also provides senior citizens with property tax relief, lowering expenses for elderly people.
18. New Hampshire
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New Hampshire is a desirable state for retirees with no tax on pensions or Social Security benefits. However, it does tax interest and dividends, which could impact seniors with large investment income. The state also offers seniors property tax exclusions, so it’s a great option for people trying to cut back on retirement.
19. Virginia
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Virginia provides notable tax incentives for retirees by exempting Social Security income from state income tax. The state also provides exclusions for other retirement income, such as pensions and IRA distributions. Seniors, especially those on modest incomes, can find property tax relief.
20. Idaho
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Idaho provides retirees with tax advantages on Social Security income, income, and pension deductions for those over 65. Idaho is also a good state for retirement because it provides seniors with property tax savings.