Lowest state income tax? My personal favorites are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
These fine states have the lowest state income tax...zero.
Probably had nothing to do with Rush Limbaugh, moving permanently to Florida, saying adios to New York state and New York City, both of which tax income.
Of the 41 states that do tax income, 35 base it on your federal return.
Tennessee and New Hampshire only tax interest and dividends.
Twenty seven states do not tax Social Security income, actually 34 when you add the seven that do not tax income at all.
-- Alabama, Arizona(thanks), Arkansas, California, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia and Wisconsin.
Twenty six states do not tax military retirement pay.
This doesn't apply to me, but men and women that have served their country, keeping us safe deserve a break IMHO.
Here they are, in alphabetical order:Alabama, Alaska, Florida, Hawaii, Illinois, Kansas, Kentucky, Louisiana, Massachusetts,
Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon*, Pennsylvania, South Dakota,
Tennessee, Texas, Washington, Wisconsin and Wyoming.
Good for these states.
Ten states exclude all federal, state and local pension income from taxation.
These include Alabama, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania.
The state income tax rate may or may not sway you to relocate.
But the seven states with zero state income tax are attractive for many.
Hope this helps.
The state having the lowest income tax does not mean that you should drop everything and move to that state.There are many more factors that should be considered when choosing where in the country or the world you can enjoy frugal retirement living.
As a resident of Arizona, about the only tax break I get is that they do not tax Social Security income which both my wife and I now receive. That is important to us, but we moved to Arizona for reasons other than no tax on Social Security.
Having over 300 days of sunshine a year is hard to put a price tag on.
So use this list as just another arrow in your quiver, but don't let it be the primary driver in determining where to retire.