Retiring in Tennessee: how your income is taxed
Tennessee is very tax-friendly for retirees. On a typical retirement income it ranks tied for #1 of 51 with 18 other states for the lowest state income tax.
The rules in Tennessee
Tennessee has no state income tax on wages or retirement income, so Social Security, pensions and retirement-account withdrawals are not taxed by the state. The Hall tax on interest and dividends was also repealed for tax years starting on or after January 1, 2021.
Calculate your Tennessee retirement taxes
State income tax in Tennessee: $0 a year
In Tennessee, 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 Tennessee you'd pay about $0 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $65,664 (6.2% total).
Tennessee ranks tied for #1 of 51 with 18 other states for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Tennessee
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $0 | $0 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $0 | $0 | $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 Tennessee's main exclusions and may differ for income-tested credits.
Moving to Tennessee 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 Tennessee come from (IRS migration data, 2022–2023).
- Florida to Tennessee
- California to Tennessee
- Georgia to Tennessee
- Texas to Tennessee
- Mississippi to Tennessee
- Kentucky to Tennessee
Frequently asked questions
Does Tennessee tax Social Security?
Not taxed. Tennessee has no state income tax. The Hall tax on interest and dividends was also repealed for tax years starting on or after January 1, 2021.
Does Tennessee tax pensions?
Not taxed. Tennessee has no state income tax.
Does Tennessee tax 401(k) and IRA withdrawals?
Not taxed. Tennessee has no state income tax.
Is Tennessee a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Tennessee charges about $0 in state income tax, ranking tied for #1 of 51 with 18 other states (lowest tax first).
Related
Sources: tn.gov. Rules reviewed .