What Are Some Tax-Friendly States for Retirees?


Quick Answer

Some of the states offering the top tax benefits to retirees include Alabama, Alaska, Florida and Mississippi. Alaska offers no sales tax or state income tax; however, U.S. News & World Report indicates property taxes are higher in the state, with a median level of $2,377 as of 2015.

Continue Reading
What Are Some Tax-Friendly States for Retirees?
Credit: Grant Squibb Cultura Getty Images

Full Answer

Alabama offers retirees a place to live with median property taxes below $400 annually. The state's 4 percent sales tax rate is also lower than most. Residents over age 65 are not subject to state property taxes or taxes on Social Security income, reports Kiplinger.

Florida offers a great climate for retirement and is tax-friendly, according to Kiplinger. The state has no income tax and does not tax Social Security benefits. However, it has sales tax, with a state base of 6 percent that goes as high as 7.5 percent when the counties add additional taxes. Florida assesses properties using their market value, but residents qualify for homestead exemption credit of up to $50,000. Seniors who live on the same property for 25 years or longer are exempt from property taxes.

Mississippi offers low property taxes, with the median under $500 annually. However, its 7 percent sales tax reduces its tax-friendliness for retirees, according to U.S. News & World Report.

Learn more about Taxes
Related Videos

Related Questions