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New Mexico taxes retirement income using state income tax rates, which range from 1.7% to 5.9% in 2024. Residents ages 65 and older can claim an $8,000 exemption to offset their tax burdens.
Here's a look at how various states tax retirement income. ... Here are the 41 states that don't tax Social Security benefits: Alabama. Alaska. Arizona. Arkansas. California. Delaware. Florida ...
Alabama will tax retirement income from 401(k) plans and IRAs. However, the state doesn't tax Social Security retirement benefits or pension income from a defined benefit retirement plan.
States that don't tax retirement income. ... That being said, do know that while Alabama and Hawaii tax 401(k) and other IRA distributions, neither one taxes pension income.
Illinois charges a flat state income tax of 4.95 percent, but all retirement income is exempt from paying the tax. This includes pension payments as well as distributions from retirement plans ...
In addition to the nine states that simply don't impose any income tax on anyone, four more states don't tax retirement income from 401(k) accounts, IRAs, and pensions, even though they do still ...
So while important, taxes on retirement income should not be your only consideration when thinking about which state to live in. The $ 22,924 Social Security bonus most retirees completely overlook.
Income tax rate (65+): 4.70%. Alabama has the second-lowest property tax in our rankings. But its sales tax rate is the fourth highest in the U.S. For You: The Average Retirement Age in 2024: US ...
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