About States That Don't Tax Pensions

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The states that do not tax pensions are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Learn about the states where pensions are not taxed with information from a portfolio manager in this free video on finance.

Part of the Video Series: Credits, Stocks & Pension
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Video Transcript

Are you trying to figure out how to maximize your after-tax rate of return? Hi, this is Roger Groh of Groh Asset Management. One of the easiest ways to do it is to reside in a state where there is no state income tax on pension distributions. Here's a list of states that have no state income tax as of today: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Boy, why isn't California on there? Because we have a 10 and a half percent sales tax coming potentially. One note, though: You have to be real cognizant that all states are facing severe shortfalls in funding, and therefore, it's likely that you use fees, which really look a lot like taxes, are probably going to go up. So you have to look at what the law is today and what the total tax structure is today, but also read the local newspapers or contact your tax attorney, then ask them what the likely tax structure is going to be in a year or two. If I had to bet that there's one state that will be better than the others, it's probably Nevada where the majority of the state sales tax comes from gambling and that is not going away. I hope that helps. I'm Roger Groh of Groh Asset, and thank you very much for spending time with me.

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