401kState Taxes on 401(k) Withdrawals
Everything on this site so far is federal law. States are a completely separate layer, and they don't agree with each other — or with the federal government — about how to tax retirement income.
Reviewed January 2026 against current IRS guidance.
Why this page can't give you a single answer
State taxation of 401(k) withdrawals depends entirely on which state you live in when you take the distribution, and the rules range from “no income tax at all” to “taxed the same as any other income” to detailed partial exemptions based on age or income — and states change these rules through their own legislatures independent of federal law.
Because of that, this page describes the general categories states fall into rather than listing specific dollar exemptions, which shift often. Always confirm current treatment with your state's department of revenue.
The broad categories
- No state income tax at all: a handful of states don't tax any income, including 401(k) withdrawals, simply because they have no personal income tax.
- Full exemption for qualified retirement income: some states specifically exempt income from 401(k)s, pensions, and similar qualified plans, sometimes with age or income requirements attached.
- Partial exemption: some states exempt retirement income up to a certain dollar amount per year, taxing anything above that threshold.
- No special treatment: many states simply tax 401(k) withdrawals as ordinary income, the same as wages, with no retirement-specific carve-out.
Moving states in retirement changes the answer
Because state tax treatment depends on your state of residency at the time you take a distribution — not the state where you earned the money originally — relocating to a different state before taking large distributions (for example, around retirement) can materially change your total tax bill. This is a common piece of retirement planning, but it should account for the full picture (property taxes, sales taxes, cost of living), not just income tax treatment of withdrawals in isolation.
A federal law protects pension-style income from source-state taxation
A federal law (4 U.S.C. § 114) generally prevents a state from taxing retirement income paid to a person who is no longer a resident of that state, for certain qualifying retirement plans distributed as periodic payments. This mostly matters for people who worked in one state, earned a pension or 401(k) balance there, and then retired to a different state — it's generally the new state of residency, not the old work state, that gets to tax the income (subject to that new state's own rules).