Pennsylvania Tax-Friendly to Retirees
While many states are pretty tax-friendly to retirees, not all tax laws are created equal. So, if you are getting ready to retire, or are already retired, and want to move to a state that offers some friendly perks, why not consider moving to Pennsylvania.
Pennsylvania is one of the tax-friendliest states for retirees. There are some pretty generous exclusions from the state income tax on many different retirement incomes. This is really great if you are moving from a state that has more rigid rules. You’ll be happy to know that the Keystone State doesn’t tax Social Security benefits, nor does it tax private or public pensions!
Pennsylvania also does not tax on IRA distribution, 401(k)s income, retirement accounts or deferred-compensation plans. Whatever income remains is subject to a very low flat rate of just 3.07%, which is very affordable for most retirees. Income tax isn’t the only area where retirees can save when they move to Pennsylvania. Medicine, food and clothing are exempt from state sales tax.
However, there is a caveat or two, as always. While the taxes for retirees in Pennsylvania are relatively low, the property taxes can be quite high. Also, if you happen to be quite wealthy and pass away, your heirs aren’t so lucky. Pennsylvania is one of the few states that have an inheritance tax (paid by the heirs), as well as an estate tax applied to those estates with a value of $5 million or more.
Jon HuserBack to all blogs
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