States with no income tax


Q. Is any state free from federal tax on federal or military pensions?

A. States having no personal income taxes include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Those that exempt the total amount of civil service annuities include Alabama, Illinois, Hawaii, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania. Kentucky exempts civil service annuities only if the employee retired before Oct. 1, 1991; North Carolina only if the individual had five years of creditable government service as of Aug. 12, 1989; Oregon for those who retired before Oct. 1, 1991, with only a portion taxed for those who retired after Oct. 1, 1991; and Wisconsin only if benefits are received from a retirement account established before 1964. Note: The fact that these states may exempt all personnel income or only civil service annuities isn’t a true measure of the total taxes you may be required to pay in those states. Be sure to check the amount you must pay in other taxes, such as sales, real estate, personal property, etc.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

Leave A Reply