The best states to retire for taxes are the ones that leave retirement income alone: Florida, Texas and Nevada tax none of it, and Pennsylvania and Illinois tax income but exempt Social Security, pensions and IRA withdrawals.

Leaving a high-tax state such as California takes state tax off your pension and IRA withdrawals only once your residency has truly changed, which is the timing question at the center of retirement relocation tax planning.

Which states have no income tax at all?

These eight states levy no personal income tax on Social Security, pensions or IRA withdrawals: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington (until its 2028 tax on income over $1 million) and Wyoming.

• Florida. The Florida Department of Revenue states it plainly: "Florida does not impose a personal income tax, so there are no filing requirements," and it confirms there is no capital gains tax for individuals either. A retiree's entire income picture — Social Security, pension, IRA, Roth conversion — carries zero Florida income tax. (Florida DOR: income tax; capital gains)
• Texas. The ban is written into the Texas Constitution itself: "The legislature may not impose a tax on the net incomes of individuals," a provision voters added in 2019. The same article prohibits an individual capital gains tax — while expressly preserving property and sales taxes, so Texas is not tax-free, just income-tax-free. (Tex. Const. art. 8, §24-a)
• Nevada. Nevada's constitution says "No income tax shall be levied upon the wages or personal income of natural persons." Pension, IRA, Social Security — none of it is touched. (Nev. Const. art. 10, §1(9))
• Alaska. The state repealed its individual income tax in 1980. (Alaska Division of Finance)
• South Dakota. The Department of Revenue says it "does not impose a state income tax." (South Dakota DOR)
• Tennessee. The Department of Revenue says Social Security, pension income, and IRA and 401(k) distributions are not subject to state tax; its old tax on interest and dividends (the Hall tax) was fully repealed beginning January 1, 2021. (Tennessee DOR)
• Washington. No individual income tax today, and its capital gains tax does not apply to trades inside retirement accounts — but a 9.9% tax on individuals and married couples with adjusted gross income over $1 million starts January 1, 2028 (Senate Bill 6346), which is worth knowing before a very large Roth conversion year. (Washington DOR)
• Wyoming. The state "does not possess an individual or corporate income tax." (State of Wyoming)

Which states exempt retirement income even though they have an income tax?

Pennsylvania and Illinois both have a personal income tax but exempt a retiree's three big income streams — Social Security, an employer pension, and IRA withdrawals.

Pennsylvania. The state's own Personal Income Tax Guide lists "Retirement income, such as: distributions from eligible Pennsylvania retirement plans after retirement age; Social Security payments; railroad retirement benefits" under income items that are never taxable. Eligible plans include 401(a) pension plans, IRAs, Roth IRAs, SEPs, and Keoghs (employer pensions, IRAs, and self-employed retirement plans). Two conditions matter: employer-plan money must be paid after you actually retire (reaching the plan's retirement age or years of service), and IRA money is exempt only once the federal 10% early-withdrawal penalty under IRC §72(t) no longer applies — generally age 59½, death, or disability. Take IRA money early, in a year that penalty applies, and Pennsylvania taxes it. (PA Personal Income Tax Guide)

Illinois. A retired Illinois resident who files a federal return still files Form IL-1040 — but the federally taxed portion of Social Security, pension, 401(k), and IRA income comes right back off on Line 5. Illinois Publication 120 confirms the subtraction covers IRAs "including amounts rolled over to a Roth IRA," so in Illinois a Roth conversion comes off on Line 5 too. What stays in the Illinois tax base is everything else in your federal adjusted gross income (your income after a few top-line deductions) — interest, dividends, capital gains. (IL-1040 Instructions; Illinois Publication 120)

Washington: a 9.9% tax on adjusted gross income over $1 million starts January 1, 2028 (Senate Bill 6346, per the Washington Department of Revenue).

What is the move actually worth in dollars?

For a retired couple with a $70,000 pension, $50,000 of traditional IRA withdrawals, and $50,000 of Social Security, California's take is about $2,973 a year under the FTB's 2025 Schedule Y rates — while Florida, Texas, Nevada, Pennsylvania, and Illinois all take $0 on the same income. That is real money, though not life-changing. If your shortlist is the Carolinas rather than a no-income-tax state, my post on South Carolina versus North Carolina taxes for retirees was written for retirees comparing those two states, and it runs one couple’s actual numbers through both.

The arithmetic, on a 2025 California return — the latest year California has published, since 2026 figures are not out yet. Married filing jointly, both spouses 65 or older:

1. Start with $120,000, which is the $70,000 pension plus $50,000 of IRA withdrawals. The couple’s $50,000 of Social Security is left out because California doesn’t tax it.
2. Minus the $11,412 standard deduction (a flat amount almost everyone subtracts before tax) leaves $108,588 of taxable income.
3. Under Schedule Y (California's married-filing-jointly rate table) in the 2025 California rate schedule: $2,044.02 plus 6% of the $25,684 above $82,904 is $3,585.06.
4. Minus $612 in personal and senior exemption credits leaves $2,973.

I run this before-and-after for every retiree weighing a move, because the answer is usually smaller than people expect in a normal year and larger than they expect in a conversion year.

How does California tax a retiree who stays — or leaves?

While you live in California, it taxes your pension and IRA withdrawals but never your Social Security. Once you have truly moved out, it cannot tax the pension or IRA money either.

The Franchise Tax Board's own pension guide says it directly: "California does not impose tax on retirement income received by a nonresident after December 31, 1995. This includes military pensions, IRA distributions, Roth IRA conversions, Roth IRA distributions, Simplified Employee Pension (SEP), and self-employed retirement plans (Keoghs)." The same publication confirms California does not tax Social Security benefits — but that residents are taxed on all income, including a pension earned entirely in another state. (FTB Publication 1005)

Federal law backs this up. Under 4 U.S.C. §114, "No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State" (a domiciliary is someone whose one permanent home, in the eyes of the law, is that state), and the statute lists exactly what counts: 401(a) plans, SEPs, 403(b) annuities, IRAs, 457 plans, governmental plans, and military retired pay. Residency is "determined under the laws of such State," so your old state decides whether you actually left.

"If I made traditional IRA contributions in California, I could save on state tax on the contribution in my state tax return. But if I retire in a different state with no state tax, then I assume I don't need to pay any state tax on the withdrawals I make, even though I may have deducted it my earlier California returns. Am I missing something here?"

— a poster on the TurboTax community

Nothing is missing — that is exactly how it works. You deduct the contributions against California tax while you work there, and once you have truly established residency elsewhere, the withdrawals are taxed only by your new state (or by no state). The one thing to get right is the word "truly," which the section on making the move count covers.

Why does the move date matter so much for a Roth conversion or big IRA withdrawal?

Because the state you are a resident of on the day the income lands is the state that taxes it. For the same couple, a $200,000 Roth conversion (moving retirement money into a Roth — you pay the tax now) adds roughly $17,991 of California tax if it happens before the move — and $0 if it happens after. The conversion is the same; only the state's share changes.

The math, again on a 2025 California return:

1. $120,000 of pension and IRA income plus the $200,000 conversion is $320,000 of income.
2. Minus the $11,412 standard deduction leaves $308,588 taxable.
3. Schedule Y gives $6,403.94 plus 9.3% of the $163,140 above $145,448, which is $21,575.96.
4. Minus $612 in credits leaves $20,964 of California tax.
5. Compare that to the $2,973 without the conversion: the conversion alone carries about $17,991 of California tax.

Do the identical conversion after a real move to Nevada, Florida, or Texas and the California piece is $0 — FTB Publication 1005 expressly lists "Roth IRA conversions" received by a nonresident as untaxed, and 4 U.S.C. §114 bars it. Even Illinois subtracts IRA amounts rolled over to a Roth.

Our post on timing a Roth conversion around a move between states was written for conversion planners, but the residency mechanics are the same ones here — the state of residence on the conversion date decides the tax. Our guide on when a Roth conversion is not worth it was written for people deciding whether to convert at all, and one of its skip cases is exactly this: a planned move out of a high-tax state. And if you are sizing conversions year by year, our guide on how much to convert each year before RMDs hit (RMDs are required minimum distributions) was written for gap-years retirees; the bracket math there pairs with the state-timing math here.

If you'd rather have someone run the before-and-after numbers on your own pension, IRA balances, and target move date, our tax advisory and planning team does exactly that for retirees weighing a move.

How do you make the move actually count?

Your old state treats you as moved only when your home, your time and your daily ties are in the new state, and in California the burden of proving it is on you. If Florida is the destination, my post on what Florida asks for and what your old state looks at before it accepts the move was written for retirees making Florida their legal home, and it walks through both sides of that test.

The mistake I see most often is moving the paperwork before the life. In Appeal of Bracamonte, a married couple who had lived in California through 2007 and owned their Escondido home since 1988 drove to Henderson, Nevada on February 25, 2008, rented an apartment, got a P.O. box, registered to vote in Nevada, obtained Nevada driver's licenses, a Nevada cell number, and Nevada bank accounts.

They kept that California home. Between February 25 and July 18, they spent 90 days at their California home, 28 days in Henderson, and 19 days at an Arizona property; they bought a Nevada house only in late September.

On July 18, 2008, the sale of their company closed, paying them $16.7 million that year. The Franchise Tax Board assessed $1,592,648 of additional tax for 2008, plus $50,337 of tax and a $12,584.25 late-filing penalty for 2009 — and California's Office of Tax Appeals sustained all of it, holding they were still California residents on the day the money landed. (2021-OTA-156P) For a retiree, the big IRA withdrawal, the Roth conversion, or the sale of an appreciated asset plays the role their company sale played: whichever state you live in the day that income lands taxes it.

The Bracamontes were selling a company, not drawing a pension, but the test that sank them is the same residency test California applies to a retiree. The Office of Tax Appeals put it bluntly: "physical presence is a factor of greater significance than mental intent and the formalities that tie one to a particular state." To change domicile (your one permanent home in the eyes of the law) you must actually move to a new residence and intend to remain there permanently or indefinitely. California's FTB Publication 1031 lists what examiners weigh:

• Time spent in California versus time spent outside it
• Location of your principal residence — and whether you kept the old one
• Where your spouse and children live
• Driver's license and vehicle registrations
• Voter registration
• Where your bank accounts are
• Where your doctors, dentists, accountants, and attorneys are
• Social ties — place of worship, clubs, professional associations
• Location of your real property and investments

No single factor decides it — the FTB says it is the strength of your ties, not the number. One caution on the calendar: spending more than nine months in California creates a presumption of residency (California starts by assuming you are a resident) under Cal. Rev. & Tax. Code §17016, but there is no day count that guarantees nonresident status. Spending only five months there does not win by itself if your home, your family, and your life are still in the state. Florida even lets you file a sworn declaration of domicile under Fla. Stat. §222.17 with the county clerk — useful evidence, but evidence is all it is. The practical sequence for a retiree:

1. Sell or genuinely vacate the old home.
2. Move your belongings and your daily life.
3. Redo every tie on the list above.
4. Only then take the big IRA withdrawal, do the Roth conversion, or sell the appreciated asset.

Do it in that order and an IRA distribution taken after the move is taxed only by the new state — in Nevada, not at all.

Do property, sales or estate taxes change the answer?

They can, and this guide ranks states on income tax only. A no-income-tax state still collects other taxes — the same article of the Texas Constitution that bans an income tax and a capital gains tax expressly preserves property tax and sales tax — so price property tax and sales tax for the specific county you're considering with that county and the state's revenue department before you decide. On estate taxes, South Dakota's Department of Revenue says it has no inheritance tax (repealed effective July 1, 2001) and no estate tax. Some retirees take the same logic a step further and leave the country entirely; my post on what a U.S. retiree owes the U.S. and Portugal in tax was written for retirees moving abroad, and the residency and pension rules there work the same way.

What else do retirees ask before moving for taxes?

Planning a move — or a big Roth conversion — in the next year or two? N&T Tax & Advisory Group helps retirees sequence a state move, IRA withdrawals, and Roth conversions so the old state's tax bill doesn't follow them — by phone or video, nationwide. Book a meeting with our team here.