Retiring in Low-Tax States: Beyond Florida and Texas
9 states have no income tax, but state isn't the whole picture. Property tax, sales tax, and Social Security taxation matter just as much.
The 9 no-income-tax states
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
States that don't tax Social Security
Most don't, but 9 states still do (in 2026): Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont.
States that don't tax retirement income
Beyond the no-income-tax states, Illinois, Mississippi, and Pennsylvania exempt most retirement income (pensions, 401(k), IRA distributions) even though they have income tax.
The hidden costs
- Texas and New Hampshire have high property taxes that offset the lack of income tax.
- Tennessee and Washington rely heavily on sales tax — pinches retirees who spend a lot.
- Florida has high homeowners insurance and HOA fees.
Best overall tax states for retirees
Often cited:
- Wyoming — no income tax, low property tax, low sales tax.
- South Dakota — no income tax, moderate sales tax.
- Tennessee — no income tax, no estate tax.
- Pennsylvania — exempts retirement income, low property tax in many counties.
Bottom line
Don't pick a state just for the income-tax headline. Run the full bill — property + sales + Social Security + retirement-income treatment — for your actual spending profile. The right state can save $5,000–$15,000/year in taxes.