Does Tennessee tax retirement income?
Question & Answer about Tennessee
Updated April 29, 2026
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Tennessee State Facts
State Flag
Tennessee
Capital
Nashville
State Bird
Northern Mockingbird
Statehood
June 1, 1796
State Flower
Iris
Population
7.1 million (2020)
Answer
Tennessee does not tax most forms of retirement income as of April 2026. The state is known for its favorable tax climate for retirees, primarily because it does not have a state income tax on wages, salaries, or retirement income. However, Tennessee does impose the Hall Income Tax on certain dividends and interest income, but this tax is being phased out and is set to be completely repealed by January 1, 2021.
Retirement income such as Social Security benefits, pensions, and distributions from retirement accounts like IRAs and 401(k)s are not subject to state income tax in Tennessee. This makes Tennessee an attractive destination for retirees looking to minimize state tax burdens. While property taxes exist, Tennessee’s overall tax structure is considered friendly for retirees, especially those relying on fixed retirement incomes.
Key Points:
- Tennessee does not tax Social Security or pension income as of 2026.
- The Hall Income Tax on dividends and interest ended in 2021.
- Tennessee has no state income tax, benefiting many retirees.
Tennessee offers a tax-friendly environment for most retirees.
Retirement income such as Social Security benefits, pensions, and distributions from retirement accounts like IRAs and 401(k)s are not subject to state income tax in Tennessee. This makes Tennessee an attractive destination for retirees looking to minimize state tax burdens. While property taxes exist, Tennessee’s overall tax structure is considered friendly for retirees, especially those relying on fixed retirement incomes.
Key Points:
- Tennessee does not tax Social Security or pension income as of 2026.
- The Hall Income Tax on dividends and interest ended in 2021.
- Tennessee has no state income tax, benefiting many retirees.
Tennessee offers a tax-friendly environment for most retirees.
