How All 50 States Are Taxing Retirees In 2021

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21.Maryland: mixed feelings

When it comes to Maryland, you have to decide if its taxes suits you. There’s no Social Security tax, and if you’re 65 or older, you can get distributions from 401(k), 403(b), and 457 plans, but also income from public and private pensions. But the thing is, any other income apart from these exclusions gets heavily taxed.

  • The State Income Tax Range is 2%(on less than $1,000 of taxable income)-5.75$(on more than $250,000 of taxable income for single people, more than $300,000 for couples);
  • The Average Combined State and Local Sales Tax Rate is 6%;
  • The Median Property Tax Rate is $1,057/$100,000 of assessed home value;
  • There is an Estate Tax, as well as an Inheritance Tax.

22.Massachusetts: not tax-friendly

It’s true, Massachusetts doesn’t tax Social Security and other government employee pension income. Despite all that, any other retirement income is taxed at a flat rate of 5%.

  • The State Income Tax Range: 5%;
  • The Average Combined State and Local Sales Tax Rate: 6.25%;
  • The Median Property Tax Rate is $1,170/$100,000 of assessed home value;
  • There is an Estate Tax, but no Inheritance Tax.

23.Michigan: not so tax-friendly

Michigan state takes more state and local taxes from retirees than other states, because of its above-average property taxes.

  • The State Income Tax Range is 4.25%;
  • The Average Combined State and Local Sales Tax Rate is 6%;
  • The Median Property Tax Rate is $1,448/$100,000 of assessed home value;
  • No Estate Tax or Inheritance Tax.

24.Minnesota: not tax-friendly

In Minnesota, Social Security benefits are taxable just as much as your federal return, but taxpayers with taxable Social Security benefits can withdraw some of their payments if their income is below a certain amount.

  • The State Income Tax Range is 5.35% (on less than $27,230 of taxable income for single filers and on less than $39,810 for couples)- 9.85(on more than $166,040 of taxable income for single filers and on more than $276,200 for joint filers);
  • The Average Combined State and Local Sales Tax Rate is 7.47%;
  • The Median Property Tax Rate is $1,082/$100,000 of assessed home value;
  • There is an Estate tax, but no Inheritance tax.
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