Retirement Taxes by State (2026): How Maryland Compares to Virginia, DC, Delaware, Pennsylvania, and the No-Tax States
Last reviewed: September 2026 · Educational, not individual advice
Maryland does not tax Social Security, and it lets each spouse 65 or older exclude up to $40,600 of pension and 401(k)-type income in 2026. That is why a retired federal couple in Montgomery County can owe less Maryland income tax than they would in Virginia or DC, even though Maryland adds a county tax. This guide to retirement taxes by state gives you the full 50-state table, then shows what actually changes if you move.
If you are a Maryland, DC, or Virginia retiree planning retirement income and asking "where should I retire for taxes?", the honest answer is that state income tax is only one of five taxes that matter, and the one that gets the most attention is often the smallest. This guide gives you the all-50-states table, then goes deep on the states people in the Baltimore–Washington area actually compare: Maryland, Virginia, the District, Delaware, Pennsylvania, and Florida. It closes with one hypothetical federal household run through all six.
Dollar amounts, age thresholds, and phase-outs change when legislatures act. Every figure here is for tax year 2026 unless noted, with the source linked, and we re-check them each fall.
The five retirement income "buckets" states treat differently
Before comparing states, split your retirement income into buckets. Two retirees in the same state can pay very different tax depending on which buckets their money comes from.
| Bucket | Typical source | Why it matters |
|---|---|---|
| Social Security | SSA benefits | Exempt in 42 states plus DC. Eight states still tax some of it in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont, all with income limits or credits. West Virginia finished its phase-out in 2026. |
| Pensions | FERS or CSRS annuity, military retired pay, state and private defined-benefit plans | Many states exempt government or military pensions but tax private ones, or cap an exclusion by age |
| 401(k), 403(b), TSP, and IRA withdrawals | Your own accounts | The most commonly taxed bucket. Some states (Maryland among them) treat employer plans and IRAs differently |
| Wages | Part-time or consulting work | Taxed almost everywhere with an income tax |
| Investment income | Interest, dividends, capital gains in a brokerage account | Usually taxed as ordinary income; Maryland adds a 2% capital-gains surtax above $350,000 of federal AGI and Washington has a standalone capital-gains tax |
Then layer the taxes that do not show up on an income tax return: property tax, sales tax, and estate or inheritance tax. "No income tax" states make up the revenue somewhere.
How all 50 states and DC tax retirement income (2026)
Rates are the top marginal rate on ordinary income unless the state uses a flat rate. "Exempt" means the state does not tax that bucket at all; "excluded up to" means a capped subtraction. Every state's official individual-income-tax page is linked in the first column so you can confirm the current year. Sources for the corrections made in this review are in the sources list.
| State | Income tax (2026) | Social Security | Pensions | 401(k) / TSP / IRA withdrawals | Estate or inheritance tax |
|---|---|---|---|---|---|
| Alabama | 2%–5% | Exempt | Defined-benefit pensions exempt | Taxable; first $6,000 exempt at 65+ | None |
| Alaska | None | Exempt | Exempt | Exempt | None |
| Arizona | 2.5% flat | Exempt | Taxable; $2,500 subtraction for federal, state, and local government pensions; military retired pay fully exempt | Taxable | None |
| Arkansas | Top 3.9% | Exempt | Taxable above a $6,000 exemption; military exempt | Same $6,000 exemption at 59½+ | None |
| California | Top 13.3% | Exempt | Taxable | Taxable | None |
| Colorado | 4.4% flat (TABOR surpluses can trim it temporarily; none projected for 2026) | Exempt at 65+; exempt at 55–64 if AGI is under $75,000 single / $95,000 joint | Excluded up to $20,000 (55–64) or $24,000 (65+), combined with other retirement income | Same cap | None |
| Connecticut | Top 6.99% | Exempt below $75,000 single / $100,000 joint AGI; partly taxable above | Exempt below the same thresholds, phasing to zero at $100,000 / $150,000 | IRA withdrawals 100% exempt from 2026 under the same thresholds | Estate: $15,000,000 exemption, flat 12%; also a gift tax |
| Delaware | 2.2%–6.6% (6.6% above $60,000) | Exempt | Excluded up to $12,500 per person at 60+ ($2,000 under 60) | Counts toward the same $12,500 cap, along with interest, dividends, and capital gains | None (estate tax repealed 2018); no sales tax either |
| District of Columbia | 4%–10.75% | Exempt | Taxable (the old $3,000 government-pension exclusion ended after 2014) | Taxable | Estate: $4,988,400 exemption for 2026 deaths, 11.2%–16% |
| Florida | None | Exempt | Exempt | Exempt | None |
| Georgia | 4.99% flat (cut retroactive to January 1, 2026) | Exempt | Excluded up to $35,000 per person at 62–64, $65,000 at 65+ | Same exclusion | None |
| Hawaii | Top 11% | Exempt | Employer-funded pensions exempt | Taxable | Estate: $5,490,000 exemption, 10%–20% |
| Idaho | Flat, about 5.3% | Exempt | Taxable; some government and military pensions partly exempt | Taxable | None |
| Illinois | 4.95% flat | Exempt | Exempt | Qualified-plan and IRA withdrawals exempt | Estate: $4,000,000 exemption, up to 16% |
| Indiana | Flat, about 3% | Exempt | Taxable (military exempt) | Taxable | None |
| Iowa | 3.8% flat | Exempt | Exempt at 55+ | Exempt at 55+ | None (inheritance tax repealed for 2025 deaths onward) |
| Kansas | Top 5.58% | Exempt (since 2024) | Public pensions exempt; private taxable | Taxable | None |
| Kentucky | 3.5% flat (2026) | Exempt | Excluded up to $31,110 per person | Same cap | Inheritance tax; spouses, children, parents, and siblings exempt |
| Louisiana | 3% flat | Exempt | Public pensions exempt; $6,000 exemption for other retirement income at 65+ | Same $6,000 exemption at 65+ | None |
| Maine | Top 7.15% | Exempt | Pension income deduction, indexed (about $45,000 per person for 2025) | Same deduction | Estate: $7,160,000 exemption, 8%–12% |
| Maryland | 2%–6.5% state, plus 2.25%–3.3% county | Exempt | Excluded up to $40,600 per person at 65+ (employer plans, reduced by Social Security received) | 401(k), 403(b), 457(b), and TSP count toward the exclusion; traditional IRA withdrawals do not | Estate: $5,000,000 exemption, up to 16%; inheritance 10% on non-lineal heirs |
| Massachusetts | 5% flat, plus 4% surtax above $1,107,750 (2026) | Exempt | Taxable (Massachusetts public pensions exempt) | Taxable | Estate: $2,000,000 exemption, up to 16% |
| Michigan | 4.25% flat | Exempt | 2026 completes the phase-in: full subtraction up to $67,610 single / $135,220 joint regardless of birth year | Same subtraction | None |
| Minnesota | Top 9.85% | Partly taxable; full subtraction below about $84,000 single / $108,000 joint (2025 thresholds) | Taxable (military exempt) | Taxable | Estate: $3,000,000 exemption, 13%–16% |
| Mississippi | Flat, about 4.4% (2026) | Exempt | Exempt | Qualified retirement withdrawals exempt (early withdrawals taxable) | None |
| Missouri | Top 4.7% | Exempt (since 2024) | Public pensions exempt; private pensions get a capped exemption | Taxable | None |
| Montana | Top 5.9% | Federally taxable portion is taxed | Taxable; small retirement subtraction | Taxable | None |
| Nebraska | Top 5.2% (2026) | Exempt (since 2024) | Taxable; military exempt | Taxable | Inheritance tax; spouse exempt, 1% on close relatives above $100,000 |
| Nevada | None | Exempt | Exempt | Exempt | None |
| New Hampshire | None (interest and dividends tax repealed for 2025 onward) | Exempt | Exempt | Exempt | None |
| New Jersey | Top 10.75% | Exempt | Excluded up to $100,000 joint / $75,000 single at 62+ if total income is $100,000 or less; partial to $150,000; none above | Same exclusion | Inheritance tax; spouse, children, parents, grandchildren exempt. No estate tax since 2018 |
| New Mexico | Top 5.9% | Exempt below $100,000 single / $150,000 joint; taxable above | Taxable; $8,000 deduction at 65+ with income limits | Taxable | None |
| New York | Top 10.9% | Exempt | Federal, state, and local government pensions exempt; other pensions excluded up to $20,000 at 59½+ | Same $20,000 exclusion | Estate: $7,350,000 exemption (2026), up to 16%, with a cliff at 105% of the exemption |
| North Carolina | 3.99% flat (2026) | Exempt | Taxable, except government pensions vested by August 12, 1989 (Bailey) | Taxable | None |
| North Dakota | Top 2.5% | Exempt | Taxable; military exempt | Taxable | None |
| Ohio | 2.75% flat (2026) | Exempt | Taxable with credits; military exempt | Taxable | None |
| Oklahoma | Top 4.75% | Exempt | Excluded up to $10,000 per person; military exempt | Same $10,000 exclusion | None |
| Oregon | Top 9.9% | Exempt | Taxable | Taxable | Estate: $1,000,000 exemption, 10%–16% |
| Pennsylvania | 3.07% flat | Exempt | Exempt once you meet the plan's retirement age or service requirement | Exempt after 59½ (no federal early-withdrawal penalty) | Inheritance: 0% spouse, 4.5% children and lineal heirs, 12% siblings, 15% others |
| Rhode Island | Top 5.99% | Exempt below income thresholds once you reach full retirement age; partly taxable above | Up to $20,000 exempt at full retirement age below the same thresholds; military exempt | Same $20,000 cap | Estate: $1,838,056 exemption (2026), up to 16% |
| South Carolina | 1.99% under $30,000, 5.21% above (new for 2026) | Exempt | Retirement deduction $3,000 under 65 / $10,000 at 65+, plus a $15,000 age-65 deduction reduced by the retirement deduction | Same deductions | None |
| South Dakota | None | Exempt | Exempt | Exempt | None |
| Tennessee | None | Exempt | Exempt | Exempt | None |
| Texas | None | Exempt | Exempt | Exempt | None |
| Utah | 4.45% flat | Taxable, offset by a credit that phases out above $54,000 single / $90,000 joint | Taxable; retirement credit up to $450; military exempt | Taxable | None |
| Vermont | Top 8.75% | Exempt below income thresholds; partly taxable above | Taxable; $10,000 exemption with income limits; military up to $10,000 | Taxable | Estate: $5,000,000 exemption, flat 16% |
| Virginia | 2%–5.75%; no local income tax | Exempt | Taxable; $12,000 age deduction at 65+, reduced dollar-for-dollar above $50,000 single / $75,000 joint; military retired pay excluded up to $40,000 | Taxable (same age deduction) | None |
| Washington | None on income; 7% capital-gains excise on long-term gains above about $270,000, 9.9% above $1,000,000 (retirement accounts exempt) | Exempt | Exempt | Exempt | Estate: $3,076,000 exemption for deaths January–June 2026, $3,000,000 after; rates 10%–35% |
| West Virginia | Top 4.58% (2026) | Exempt (phase-out completed 2026) | Taxable; $8,000 senior modification at 65+ (or public-pension modification, whichever is larger) | Taxable, same modification | None |
| Wisconsin | Top 7.65% | Exempt | Taxable; $5,000 exclusion at 65+ with income limits; some public pensions exempt | Taxable, same exclusion | None |
| Wyoming | None | Exempt | Exempt | Exempt | None |
Three patterns stand out for our readers. First, every state bordering Maryland exempts Social Security. Second, Pennsylvania is the only neighbor that exempts pensions and retirement-account withdrawals outright, and it pays for that with an inheritance tax. Third, Maryland is the only state in the country with both an estate tax and an inheritance tax.
Does Maryland tax retirement income?
Yes, but less than its reputation suggests once you are 65. Here is how each bucket works in 2026, from the Maryland Comptroller's individual tax pages and Technical Bulletin 51.
Social Security. Fully subtracted. Maryland never taxes it.
Pensions, TSP, 401(k), 403(b), and 457(b). If you are 65 or older (or totally disabled), each spouse can exclude up to $40,600 of income from an employer retirement plan in 2026. The cap tracks the maximum Social Security benefit, which is why it dropped from $41,200 in 2025. The catch: the exclusion is reduced dollar-for-dollar by the Social Security you receive. A retiree with a $45,000 FERS annuity and $28,000 of Social Security excludes $12,600, not $40,600.
Traditional IRA withdrawals. These do not qualify for the pension exclusion. Neither do SEP, Keogh, or Roth accounts. This is the rollover trap: money left in the TSP or a 401(k) can be excluded; the same money rolled to an IRA cannot. A bill to add IRAs to the exclusion (HB 707) had a hearing in February 2026 and went no further.
Military and first-responder pensions. Military retired pay gets its own subtraction: $12,500 under 55, $20,000 at 55 and older. Retired law-enforcement, correctional, and fire-rescue personnel can exclude $15,000 at 55+ from a government plan. Bills to raise both amounts stalled in the 2026 session.
Rates and the county tax. State brackets run from 2% to 5.75%, with 6.25% and 6.5% tiers above $500,000 single / $600,000 joint that started in tax year 2025. Every county adds its own income tax on the same taxable income, from 2.25% (Worcester) to 3.3% (Dorchester and Kent); Montgomery County is 3.2%. The pension exclusion reduces the county tax too, because both use the same Maryland taxable income.
Capital gains. Since tax year 2025, net capital gains carry an additional 2% state tax when federal AGI exceeds $350,000. Gains inside retirement accounts and the sale of a primary residence under $1.5 million are excluded (Technical Bulletin 58).
Senior tax credit. Residents 65 and older with federal AGI of $100,000 or less (single) or $150,000 or less (joint) get a nonrefundable credit of $1,000, or $1,750 for a joint return where both spouses qualify.
Estate and inheritance. Maryland taxes estates above $5,000,000 (not indexed) at up to 16%, and separately charges a 10% inheritance tax on property passing to anyone other than a spouse, child, grandchild, parent, sibling, or a few other close relatives. Both can apply to the same estate.
How Virginia, DC, Delaware, and Pennsylvania compare for a Maryland retiree
These are the moves we hear about most. The table strips each state to the rules that drive the decision.
| Rule | Maryland | Virginia | District of Columbia | Delaware | Pennsylvania |
|---|---|---|---|---|---|
| Top income tax rate | 5.75% (6.5% over $1M single) + county 2.25%–3.3% | 5.75%, no local tax | 10.75% over $1M; 6.5% at $40,000–$60,000 | 6.6% over $60,000, no local tax | 3.07% flat (local earned-income tax on wages only) |
| Social Security | Exempt | Exempt | Exempt | Exempt | Exempt |
| FERS / CSRS annuity | Counts toward $40,600 exclusion at 65+, less Social Security | Taxable; $12,000 age deduction at 65+, phased out above $75,000 joint AFAGI | Taxable, no exclusion | Counts toward $12,500 exclusion at 60+ | Exempt |
| TSP / 401(k) withdrawals | Counts toward the same exclusion | Taxable (same age deduction) | Taxable | Counts toward the same $12,500 | Exempt after 59½ |
| Traditional IRA withdrawals | Taxable, no exclusion | Taxable (same age deduction) | Taxable | Counts toward the same $12,500 | Exempt after 59½ |
| Military retired pay | $20,000 subtraction at 55+ | Up to $40,000 subtraction, any age | Taxable | $12,500 subtraction, any age | Exempt |
| Standard deduction (joint) | $6,700 | $17,000 | $32,200 (follows federal) | $6,500 + $2,500 per spouse 65+ | None (flat tax on income classes) |
| Sales tax | 6% | 5.3%–7% by locality | 6% | None | 6% (7%–8% in Allegheny and Philadelphia) |
| Estate tax | $5,000,000 exemption, to 16% | None | $4,988,400 exemption, 11.2%–16% | None | None |
| Inheritance tax | 10% on non-lineal heirs | None | None | None | 4.5% children, 12% siblings, 15% others |
A few things this table makes obvious:
- Virginia is not a tax haven for pensioners. Its $12,000 age deduction disappears once a couple's income (excluding Social Security) passes $87,000. Maryland's exclusion has no income limit; it is only reduced by Social Security.
- DC is the least friendly of the five for retirement withdrawals. Everything but Social Security is taxed at rates that reach 6.5% by $40,000 of taxable income, and the estate exemption is the lowest in the group. Its large standard deduction softens that for modest incomes.
- Delaware wins on sales and property tax more than income tax. The $12,500 exclusion is small next to Maryland's, but there is no sales tax, no estate tax, and property tax rates that run roughly half of Montgomery or Howard County's.
- Pennsylvania is the cleanest income-tax answer for someone living on pensions and retirement accounts. The cost is the inheritance tax, which starts at 4.5% on the first dollar to your children, with no exemption.
One federal couple, six states: a hypothetical
Meet Sam and Dan, a hypothetical Montgomery County couple a few years into retirement (they are composites, not clients). Both are 67 and file jointly. Sam retired from NIH; Dan from a logistics company.
- Sam's FERS annuity: $45,000
- Sam's TSP withdrawals: $30,000 (left in the TSP, not rolled to an IRA)
- Dan's small prior-employer pension: $8,000
- Social Security: $28,000 (Sam) + $20,000 (Dan) = $48,000, of which $40,800 is federally taxable (when to claim is its own six-figure decision)
- Interest and dividends: $5,000
- Federal AGI: $128,800
Here is their state income tax only, using 2026 rules, the standard deduction, and rounding to the nearest $50. This is an illustration of how the rules interact, not a tax return; actual results depend on every line of your return.
| State | How the rules apply | Approximate state (and local) income tax |
|---|---|---|
| Maryland (Montgomery County) | Social Security exempt. Sam excludes $12,600 ($40,600 minus $28,000 SS); Dan excludes his full $8,000 pension. Taxable income about $52,300. State tax about $2,450 plus 3.2% county tax about $1,650, minus the $1,750 senior credit. | ≈ $2,350 |
| Virginia (Fairfax County) | Social Security exempt. Age deduction shrinks from $24,000 to $11,000 because income excluding SS is $88,000. $17,000 standard deduction and $3,460 of exemptions. Taxable about $56,500. | ≈ $3,000 |
| District of Columbia | Social Security exempt. No retirement exclusion. $32,200 standard deduction. Taxable about $55,800 at 4%, 6%, and 6.5%. | ≈ $3,200 |
| Delaware (Sussex County) | Social Security exempt. Each spouse excludes $12,500 of retirement income. $11,500 of standard and age deductions, $440 of credits. Taxable about $51,500 on a joint return; filing separately in Delaware can lower it further. | ≈ $2,000 |
| Pennsylvania (York County) | FERS, TSP, pension, and Social Security all exempt. Only the $5,000 of interest and dividends is taxed at 3.07%. | ≈ $150 |
| Florida | No income tax. | $0 |
The surprise for most Maryland readers is the first two rows: this couple pays less income tax in Maryland than in Virginia or DC, because Maryland's pension exclusion and senior credit outweigh the county tax at this income level. The gap to Delaware is a few hundred dollars. Pennsylvania and Florida are the real income-tax savings, roughly $2,200 a year here.
Now add the taxes the table leaves out:
- Property tax. On a $650,000 home, Montgomery County's effective rate of roughly 1% is about $6,500 a year. Sussex County, Delaware and York County, Pennsylvania rates are closer to 0.5%–0.6% on comparable homes, and Florida caps assessment growth for homesteaders. For this couple, property tax differences are two to three times the income tax differences.
- Sales tax. Delaware has none. A household spending $40,000 a year on taxable goods pays about $2,400 in Maryland.
- What the heirs pay. If Sam and Dan's estate is under $5,000,000 and passes to their children, Maryland's estate and inheritance taxes cost nothing. If a share goes to a niece or a friend, Maryland's 10% inheritance tax applies. Pennsylvania's 4.5% inheritance tax hits the children on the first dollar. Florida, Virginia, and Delaware charge nothing.
- What you give up. Moving to save $2,200 a year means leaving proximity to grandchildren, doctors, and a paid-off home. A one-time $40,000 moving and transaction cost takes 18 years of Pennsylvania's income-tax savings to recover.
If you want this modeled with your actual numbers, including the TSP-versus-IRA rollover decision, book a call.
The TSP rollover decision most Maryland federal retirees miss
Because Maryland's pension exclusion covers employer plans (401(a), 403, and 457(b), which includes the TSP) but not traditional IRAs, a full TSP-to-IRA rollover can quietly cost a Maryland federal retiree up to $40,600 of exclusion a year. At a combined state and county rate of about 8%, that is up to $3,250 of Maryland tax per spouse per year on money that would have been excluded.
That does not make the rollover wrong. IRAs offer more investment choice, easier Roth conversions, and simpler beneficiary handling, and the exclusion is reduced by Social Security anyway. But for a Maryland resident it belongs in the analysis. Our 401(k) rollover guide covers the federal side, and Roth conversions in the gap years shows how partial conversions before Social Security fit alongside it.
"No income tax" states: simple headline, not always simple outcome
As of 2026, nine states have no broad personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire's tax on interest and dividends ended for 2025, and Tennessee's ended earlier. Four more states with an income tax exempt essentially all retirement income: Illinois, Iowa (at 55+), Mississippi, and Pennsylvania.
"No income tax" does not mean "no tax." Washington has a 7% excise on long-term capital gains above roughly $270,000 (9.9% above $1,000,000), and an estate tax that starts at about $3,000,000 with rates up to 35%. Texas and New Hampshire have some of the highest property tax rates in the country. Tennessee's combined sales tax is near 9.5%. Whether a state is "tax-friendly" for you depends on whether you rent or own, how much you spend, where your income comes from, and how large your estate is.
Questions to answer before you move for taxes
- Which bucket is most of your income? Pensions and employer-plan withdrawals favor Maryland (with the exclusion), Pennsylvania, and Illinois. IRA-heavy retirees do worse in Maryland than the headlines suggest.
- Are you 65 yet? Maryland's exclusion, Virginia's age deduction, and Delaware's $12,500 all switch on at 60 or 65. Retiring at 58 and moving at 66 are different decisions.
- Will you really change domicile? Keeping the Maryland house, Maryland driver's license, and Maryland doctors while "living" in Florida invites a residency audit. The Comptroller looks at where you spend more than 183 days, where you vote, and where your things are.
- Who inherits, and from which state? Maryland's inheritance tax is the one most people forget until it applies to a sibling or a friend.
- What does the move cost? Transaction costs, a new tax basis on a replacement home, and lost Maryland homestead credits can erase a decade of savings.
Talk to your CPA before changing domicile, and to an estate attorney if the move is partly about what passes to heirs. If you want the tax, income, and estate pieces coordinated in one plan, that is what our retirement planning service does.
FAQ: Maryland and state retirement taxes
Does Maryland tax retirement income? Maryland exempts Social Security entirely. Pensions, TSP, 401(k), and 403(b) income qualify for a per-person exclusion of up to $40,600 in 2026 once you are 65, reduced by the Social Security you receive. Traditional IRA withdrawals, wages, and investment income are taxed at state rates up to 5.75% plus a county tax of 2.25% to 3.3%.
Does the Maryland pension exclusion apply to IRA withdrawals? No. The exclusion covers employee retirement systems under IRC 401(a), 403, and 457(b), which includes the TSP, 401(k), 403(b), and defined-benefit pensions. Traditional, Roth, rollover, and SEP IRAs do not qualify. Money rolled from the TSP to an IRA loses the exclusion. A 2026 bill to add IRAs did not advance.
Is it cheaper to retire in Delaware or Maryland? For income tax, the difference is often small for a pensioner over 65 because Maryland's $40,600 exclusion is larger than Delaware's $12,500. Delaware's advantages are no sales tax, no estate or inheritance tax, and property tax rates roughly half of the Maryland suburbs. Run all four taxes, not just income tax, before deciding.
Which states tax Social Security in 2026? Eight: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont, each with income thresholds or credits that exempt many retirees. West Virginia completed its phase-out in 2026. The other 42 states and the District of Columbia do not tax Social Security benefits.
Does DC tax retirement income? Yes. The District exempts Social Security but taxes pensions, 401(k), TSP, and IRA withdrawals as ordinary income at rates from 4% to 10.75%, with no retirement-income exclusion; the old $3,000 government-pension exclusion ended after 2014. DC also has an estate tax with a $4,988,400 exemption for 2026 deaths.
Which states have no tax on pensions? The nine no-income-tax states, plus Alabama (defined-benefit pensions), Hawaii (employer-funded pensions), Illinois, Iowa (55+), Mississippi, and Pennsylvania (after plan retirement age). Many others exempt government or military pensions specifically, including New York, Kansas, Missouri, Arizona, and Virginia for military retired pay.
Sources
- Maryland Comptroller, Technical Bulletin 51: Pension exclusion and retirement subtractions; 2026 pension exclusion guidance ($40,600); Technical Bulletin 58: 2% capital gains tax; Tax Alert on 2025 rate and deduction changes; Tax Tip 42: Estate tax
- Maryland Register of Wills, Inheritance tax
- Maryland General Assembly, HB 707 (2026), HB 761 (2026), HB 653 (2026)
- Virginia Tax, Subtractions and Military benefits FAQ
- DC Office of Tax and Revenue, Individual income tax rates and October 1, 2025 tax changes (estate exemption); DC Code §47-1803.02
- Delaware Code, Title 30, §1106
- Pennsylvania Department of Revenue, Gross compensation (retirement income) and Inheritance tax
- West Virginia Tax Division, 2026 rate reduction and Social Security modification
- South Carolina DOR, H.4216 rate change; Georgia Governor's Office, HB 463 signing; North Carolina DOR, Tax rate schedules
- Washington DOR, Capital gains tiered rates and Estate tax tables
- Connecticut OLR, Taxation of retirement income (2024-R-0130); Connecticut DRS, Estate and gift tax
- New York DTF, Estate tax; Massachusetts DOR, 4% surtax; Rhode Island Division of Taxation, 2026 estate tax update
- Tax Foundation, State individual income tax rates 2026 (cross-check for rates not listed above)
Written by Shuo Li, CFP®, CIMA®, ChFC®, Founder & CEO of Allset Wealth. Allset Wealth is a financial planning firm in Hunt Valley and North Bethesda, Maryland, serving federal employees, tech employees, and business owners across Maryland, DC, and Virginia.
This article is for educational and informational purposes only and does not constitute investment, tax, legal, or insurance advice. State tax rules change; confirm current figures with the state revenue department or your tax professional before acting. Sam and Dan are hypothetical composites, not clients. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities and investment advisory services offered through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial. LPLE and LPL Financial are not affiliated with Allset Wealth.