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State Tax Burdens on Retirees

By Gerry W. Beyer

USA-Money

Consider these various typesof state taxes before choosing a retirement destination.

Pensions and retirementincome can vary drastically from state to state.  Alaska, Florida, Nevada, South Dakota, Texas,Washington, and Wyoming do not tax income at all, while New Hampshire andTennessee tax dividends and interest only. Most other states offer exclusions that protect some, or all, retirementincome.  Only California, Minnesota,Nebraska, North Dakota, Rhode Island, and Vermont offer no safe haven forretirement income.

States are generous for themost part when it comes to taxing Social Security benefits.  Only 14 states tax benefits to some extentand some only tax benefits when they exceed a certain threshold while othersallow benefits to qualify for tax breaks.

And as I have previouslydiscussed, all but 19 states and the District of Columbia do not have an estateor inheritance tax.

Click here for a Retiree TaxMap which further examines these tax categories.

See RachelL. Sheedy, States Differ on Retiree TaxBurden, Kiplinger, Sept. 2013.

Posted in:
Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax and Travel