If you’ve been asking yourself what are the 14 states that don t tax pensions, you’re not alone. Many retirees carefully evaluate where to live based on how their retirement income will be taxed. As of August 2025, there are 13 states that completely exempt pension income from state taxes. Some guides still refer to 14 states, but the accurate and updated count today is 13.
The states are:
Alaska, Florida, Illinois, Iowa, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Table of Contents
Key Points Summary
✨ Quick insights for fast readers:
- 13 states in 2025 do not tax pensions at all.
- The “14 states” phrase is common but slightly outdated.
- These states often also avoid taxing Social Security and other retirement income.
- Always check property and sales taxes before relocating.
Why These States Don’t Tax Pensions
Each of these states has its own reason for offering pension tax relief. Some have no state income tax at all, while others choose to exempt retirement income specifically to attract and retain retirees.
- No income tax states: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming simply do not tax personal income, which includes pensions.
- Flat tax with retirement exemptions: Illinois and Pennsylvania levy income taxes, but both exclude retirement income such as pensions, IRAs, and 401(k) withdrawals.
- Retiree-friendly carve-outs: Mississippi exempts qualified retirement income, while Iowa phased out pension taxes for those over 55.
- Special cases: New Hampshire previously taxed interest and dividends but has fully phased that out, leaving pensions untaxed. Tennessee ended its Hall income tax in 2021, making all retirement income exempt.
Benefits for Retirees
Living in one of these states can make a significant difference to retirees depending on the size of their pension and other retirement accounts. Here’s why:
- Larger disposable income: Retirees keep more of their pension checks.
- Predictable tax planning: Knowing that retirement income is shielded helps with long-term financial stability.
- Appealing relocation options: Many retirees choose to move to one of these states specifically for the tax benefits.
Things to Watch Beyond Pension Taxes
While these states don’t tax pensions, retirees should keep in mind:
- Sales tax: Some, like Tennessee, make up for lost income tax revenue with higher sales taxes.
- Property tax: States such as Texas offer relief on income but have some of the highest property taxes in the country.
- Healthcare and cost of living: Even with tax savings, factors like medical access and housing costs should influence retirement planning.
Are There Really 14 States?
You’ll often see articles or discussions about 14 states that don’t tax pensions. The confusion arises because lists have shifted over the years. Iowa, for instance, only recently stopped taxing retirement income. Some older counts may also include states that partially tax pensions but allow large exemptions.
As of August 2025, the most accurate number is 13 states. That number could grow if other states pass similar laws in the future.
Retirement Planning Tips
If you are considering relocating for tax reasons, keep these steps in mind:
- Look at your full income picture: Consider Social Security, IRA distributions, and other sources alongside pensions.
- Evaluate total tax burden: Income tax is just one part of the puzzle—property and sales taxes matter too.
- Stay updated on law changes: States occasionally change their tax structures, sometimes adding or eliminating retiree benefits.
- Talk with a professional: Before making a big move, seek personalized guidance from a financial advisor or tax professional.
Final Thoughts
So, what are the 14 states that don t tax pensions? The reality in 2025 is that 13 states fully exempt pension income: Alaska, Florida, Illinois, Iowa, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming. Whether you’re planning retirement or already enjoying it, understanding where pensions aren’t taxed can make a huge difference in your financial well-being.
Have you thought about moving to a more tax-friendly state, or are you staying put? Share your thoughts and experiences in the comments—I’d love to hear your perspective