36. Ohio
- State’s ranking: Mixed tax situation
- State income tax: between 1.98 percent (on income over $10,650 of taxable income) and 4.997 percent (on taxable income over $213,350).
- The average property tax: $1,641 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 7.15 percent
- Estate tax/inheritance tax: No/No
Fortunately, Ohio exempts Social Security benefits from its income taxes and it also gives retirees the opportunity to claim a tax credit of up to $200 on all other types of retirement income sources. In general, pension income in the Buckeye State is exempt.
37. Oklahoma
- State’s ranking: Not tax-friendly 🙁
- State income tax: between 0.5 percent (on up to $1,000 of taxable income for singles and up to $2,000 for married couples filing jointly) and 5 percent (on taxable income over $7,200 for singles and over $12,200 for married joint filers)
- The average property tax: $974 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 8.94 percent
- Estate tax/inheritance tax: No/No
Like many other states listed here, Oklahoma doesn’t tax Social Security benefits either (in the same category goes Civil Service Retirement System benefits too). The Sooner State residents can also eliminate up to $10,000 per individual ($20,000 per married couple) of all other types of retirement income sources.
However, the state has one of the biggest combined sales tax rates in the U.S.—making it quite unfriendly for retirees.
38. Oregon
- State’s ranking: Not tax-friendly 🙁
- State income tax: between 5 percent (on up to $3,450 of taxable income for singles and up to $6,900 for married couples who file jointly) and 9.9 percent (on taxable income over $125,000 for those who file as singles and over $250,000 for married couples who file jointly).
- The average property tax: $1,121 in taxes per $100,000 of assessed home value
- The average state and local sales tax: None
- Estate tax/inheritance tax: Yes/No
The Beaver State doesn’t tax Social Security benefits, but, unfortunately, almost all other types of retirement income sources are taxed. Oregon’s residents can deduct up to $6,250 of federal income taxes that are paid on the Oregon return. Plus, there’s an income credit designed for retirees. However, that’s not enough.
The lack of sales taxes isn’t helping that much either.
39. Pennsylvania
- State’s ranking: Not tax-friendly 🙁
- State income tax: Flat 3.07 percent
- The average property tax: $1,674 in taxes per $100,000 of assessed home value
- The average state and local sales tax: 6.34 percent
- Estate tax/inheritance tax: No/Yes
In general, Pennsylvania treats its retired residents with respect. But, when it comes to property taxes, seniors can’t see the light at the end of the tunnel. Indeed, the state offers a Property Tax/Rent Rebate Program, but it has certain restrictions and limitations.
40. Rhode Island
- State’s ranking: Least tax-friendly 🙁
- State income tax: between 3.75 percent (on up to $62,250 of taxable income) and 5.99 percent (on taxable income over $149,150)
- The average property tax: $1,723 in taxes per $100,000 of assessed home value
- State sales tax: 7 percent
- Estate tax/inheritance tax: Yes/No
Wealthy retirees would probably want to avoid retiring in the Ocean State. Retirees here pay taxes on their Social Security benefits when their federal adjusted gross income reaches $83,550 for singles and $104,450 for joint filers.
The same category can’t take advantage of the state income tax exemption of up to $15,000 regarding payouts from government, military retirement, or private plans. The average property tax rate is also high, meaning that those who own a four hundred thousand dollars house will have to pay approximately $6,892 every single year in real property taxes.
Another scary thing for seniors is the state’s estate tax. Its rate can go up to 16 percent on houses that are worth $1,561,719 or more.
