Retiring in Hawaii: how your income is taxed
Hawaii is fairly tax-friendly for retirees. On a typical retirement income it ranks #22 of 51 for the lowest state income tax.
The rules in Hawaii
- Social Security: Hawaii does not tax Social Security or Tier 1 Railroad Retirement benefits.
- Pensions: Employer-funded pensions are fully exempt: all public pensions (federal civil service, military, state/county systems) and private pensions to which the employee did not contribute. If the employee contributed to a private plan, the portion from employee contributions is taxable (Schedule J). No dollar cap.
- 401(k), 403(b) and IRA withdrawals: IRA withdrawals are taxed because Hawaii treats IRAs as your own investments. A rollover IRA funded from a qualifying employer pension keeps the pension's exempt status. For 401(k)s, the part from your own elective deferrals is taxable and employer-funded amounts can be exempt.
- At 65 and older: Each filer 65 or older claims one more $1,144 personal exemption.
Calculate your Hawaii retirement taxes
State income tax in Hawaii: $138 a year
In Hawaii, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Hawaii you'd pay about $138 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $65,526 (6.4% total).
Hawaii ranks #22 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Hawaii
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $24 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $138 | $0 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $2,669 | $1,170 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Hawaii's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Hawaii in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Hawaii come from (IRS migration data, 2022–2023).
- California to Hawaii
- Texas to Hawaii
- Washington to Hawaii
- Florida to Hawaii
- Virginia to Hawaii
- Colorado to Hawaii
Frequently asked questions
Does Hawaii tax Social Security?
Not taxed. Hawaii does not tax Social Security or Tier 1 Railroad Retirement benefits.
Does Hawaii tax pensions?
Not taxed. Employer-funded pensions are fully exempt: all public pensions (federal civil service, military, state/county systems) and private pensions to which the employee did not contribute. If the employee contributed to a private plan, the portion from employee contributions is taxable (Schedule J). No dollar cap.
Does Hawaii tax 401(k) and IRA withdrawals?
Taxed. IRA withdrawals are taxed because Hawaii treats IRAs as your own investments. A rollover IRA funded from a qualifying employer pension keeps the pension's exempt status. For 401(k)s, the part from your own elective deferrals is taxable and employer-funded amounts can be exempt.
Is Hawaii a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Hawaii charges about $138 in state income tax, ranking #22 of 51 (lowest tax first).
Related
Sources: files.hawaii.gov. Rules reviewed .