46. Vermont
- State’s ranking: Least tax-friendly 🙁
- State income tax: between 3.35 percent (on up to $38,700 of taxable income for single filers and up to $64,600 for those who file jointly) and 8.75 percent (on taxable income over for $195,450 for single filers and up to $237,950 for joint filers)
- The average property tax: $1,908 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 6.22 percent
- Estate tax/inheritance tax: Yes/No
It seems that only those who are rich can afford to pay their tax bills in the Green Mountain State. Vermont taxes almost all types of retirement income sources. In addition, a big part of your Social Security benefits is taxed too.
Although clothing, food, and nonprescription drugs are exempt here, Vermont’s property taxes translate to headaches for most seniors. Fortunately, some retirees can enjoy a tax credit that’s worth 24 percent of the Federal Elderly and Permanently Disabled Tax Credit only if their household income is in a certain range.
47. Virginia
- State’s ranking: Tax-friendly 🙂
- State income tax: between 2 percent (on up to $3,000 of taxable income) and 5.75 percent (on taxable income over $17,000)
- Average property tax: $858 in taxes per $100,000 of assessed home value
- Average state sales tax: 5.65 percent
- Estate tax/inheritance tax: No/No
Virginia is a great state for seniors as it offers a wide range of tax breaks to its retired residents. Social Security benefits aren’t taxed here and those who are 65 and older can actually deduct up to $12,000 per individual of income.
Regarding property taxes in the Old Dominion, they are pretty modest with excellent tax breaks for retirees. Overall, Virginia is an awesome retirement pick.
48. Washington
- State’s ranking: Tax-friendly 🙂
- State income tax: None
- The average property tax: $1,125 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 9.21 percent
- Estate tax/inheritance tax: Yes/No
Washington doesn’t have a broad-based personal income tax. As a result, retired residents are worry-free when it comes to paying taxes on their Social Security benefits, pensions, or other types of retirement income sources.
Unfortunately, it’s not that friendly when we spot the combined state and local sales tax rates. In fact, the Evergreen State has some of the highest state and local sales tax rates in the U.S. However, Washington can brag about some pretty cool property tax relief programs.
49. West Virginia
- State’s ranking: Mixed tax situation
- State income tax: between 3 percent (on up to $10,000 of taxable income) and 6.5 percent (on taxable income of $60,000 or more)
- The average property tax: $615 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 6.40 percent
- Estate tax/inheritance tax: No/No
The Mountain State has a misty tax picture. Social Security benefits are partially taxed, as well as withdrawals from all types of retirement accounts. Property taxes are low and sales taxes are pretty reasonable in West Virginia, however, retirees don’t get as much respect as they deserve.
50. Wisconsin
- State’s ranking: Least tax-friendly 🙁
- State income tax: between 4.0 percent (on up to $11,450 of taxable income for single filers or up to $15,270 for married couples) and 7.65 percent (on taxable income over $252,150 for single filers or over $336,200 for married couples)
- The average property tax: $615 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 5.44 percent
- Estate tax/inheritance tax: No/No
Wisconsin exempts Social Security benefits from its state taxes, but other types of income are taxable (annuities, pensions, and distributions from 401(k) and IRAs plans. The Badger State has the fifth-highest property tax in the nation.
However, if their federal adjusted gross income is actually less than $15,000 when filing individually, Wisconsin residents who are 65 and older can take up to $5,000 of all types of retirement income sources.
51. Wyoming
- State’s ranking: Most tax-friendly 🙂
- State income tax: None
- The average property tax: $635 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 5.32 percent
- Estate tax/inheritance tax: No/No
Wyoming has a remarkable behavior toward its retired residents. In fact, the Equality State has the lowest taxes when it comes to retirement. No inheritance, estate, or income taxes. Also, sales taxes are pretty low. Wyoming should definitely be at the top of our list.
Curious about its property taxes? Well… homeowners here are living their best life since they are paying low taxes. For instance, for a house valued at $400,000, the homeowner will have to pay approximately $2,540, which is considerably small.
If you want to hear more good news, note that some seniors are eligible for a refund consisting of $900 for those who file as individuals.
