How Pennsylvania taxes retirement income
Pennsylvania does not tax Social Security benefits. Pension income is also exempt. Pennsylvania exempts all retirement income from state income tax. Social Security benefits are not taxed. Pension income is fully exempt (confirmed independently via PA SERS: 'retirement benefits are not subject to Pennsylvania state and local taxes'). 401(k) and IRA distributions after retirement age are not taxed. These exemptions apply to all residents regardless of age.
Retirement income tax in Pennsylvania, at a glance
| Income type | Taxed by Pennsylvania? |
|---|---|
| Social Security | No |
| Pensions | No |
| 401(k) / IRA withdrawals | No |
| Estate / inheritance tax | Inheritance tax |
| Avg. property tax rate | 1.26% of home value |
Does Pennsylvania tax Social Security benefits?
No. Pennsylvania does not tax Social Security benefits.
Does Pennsylvania tax pensions and 401(k) or IRA withdrawals?
Pennsylvania exempts pension income, though other retirement withdrawals may still be taxed. Pennsylvania exempts all retirement income from state income tax. Social Security benefits are not taxed. Pension income is fully exempt (confirmed independently via PA SERS: 'retirement benefits are not subject to Pennsylvania state and local taxes'). 401(k) and IRA distributions after retirement age are not taxed. These exemptions apply to all residents regardless of age.
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- Pennsylvania taxation of retirement income (Social Security, pensions, 401(k)/IRA): Pennsylvania Department of Revenue / Taxation.
- Pennsylvania estate / inheritance tax: Pennsylvania tax authority.