Florida does not tax pensions. The state constitution bans a personal income tax, so pension payments, 401(k) and IRA withdrawals, Social Security, annuity income, and every other form of retirement income arrive without any state tax deduction. Federal income tax still applies to most of that money, and Florida makes up its revenue through sales and property taxes, so the full picture is more nuanced than the headline number suggests.
What Florida Leaves Untaxed
Because there is no state income tax at all, no category of retirement income is taxed at the state level. There are no income thresholds, no phase-outs, and no carve-outs by pension type. The exemption covers:
- Private pensions from former employers, at any payout amount
- 401(k) and 403(b) distributions
- Traditional IRA withdrawals, including rollovers
- Roth IRA and Roth 401(k) distributions
- Social Security benefits at any income level
- Military pensions from all branches of service
- Federal, state, and local government pensions, including the Federal Employees Retirement System
- Annuity income, whether from a qualified plan or a private contract
Many states that market themselves as retirement-friendly still tax 401(k) withdrawals or pension income above certain amounts. Florida does not. The uniformity is the point.
Why the Exemption Is Constitutional, Not Statutory
Florida’s tax treatment of pensions isn’t a legislative preference that could shift with a new session. Article VII, Section 5 of the state constitution prohibits the state from levying an income tax on “natural persons,” meaning individual people rather than corporations, beyond what the federal government allows as a credit against similar federal taxes.1Florida Senate. The Florida Constitution Changing that would require a statewide constitutional amendment through a voter referendum, not just a bill.
For someone planning decades of retirement spending, that permanence matters. A statutory pension exemption in another state can be reversed the next time the budget is tight.
Federal Taxes Still Apply to Your Pension
Moving to Florida does not lower your federal tax bill. The IRS taxes most pension payments as ordinary income, and your Florida address gives you no special exemption or deduction.2Internal Revenue Service. Topic no. 410, Pensions and Annuities Distributions from traditional 401(k)s, traditional IRAs, and 403(b)s are also federally taxable.
For 2026, the federal income tax brackets are:3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- 10% up to $12,400 (single) or $24,800 (married filing jointly)
- 12% from $12,401 to $50,400 (single) or $24,801 to $100,800 (joint)
- 22% from $50,401 to $105,700 (single) or $100,801 to $211,400 (joint)
- 24% from $105,701 to $201,775 (single) or $211,401 to $403,550 (joint)
- 32% from $201,776 to $256,225 (single) or $403,551 to $512,450 (joint)
- 35% from $256,226 to $640,600 (single) or $512,451 to $768,700 (joint)
- 37% above $640,600 (single) or $768,700 (joint)
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. Taxpayers 65 or older get an additional $2,050 (single) or $1,650 per qualifying spouse (joint). A married couple where both spouses are 65 or older can shelter $35,500 of income before any federal tax applies. Retirees with modest pension and Social Security income often stay entirely within the 10% and 12% brackets after the deduction.
One practical trap: because Florida has no state withholding, it’s easy to underestimate what you owe the IRS. If federal tax isn’t being withheld from your pension checks or retirement distributions, you’ll likely need to make quarterly estimated payments to avoid an underpayment penalty.
Social Security Under Federal Rules
Florida will never tax your Social Security benefits, but the IRS might. The federal government uses a “combined income” formula — adjusted gross income, plus nontaxable interest, plus half your Social Security benefits — to decide how much of the benefit is taxable.4Internal Revenue Service. IRS Reminds Taxpayers Their Social Security Benefits May Be Taxable
- Single filers: combined income above $25,000 makes up to 50% of benefits taxable; above $34,000, up to 85% can be taxed.
- Married filing jointly: combined income above $32,000 makes up to 50% of benefits taxable; above $44,000, up to 85% can be taxed.
These thresholds have not been adjusted for inflation since 1983 and 1993, so more retirees cross them each year. A couple with a modest pension and two Social Security checks can easily exceed $44,000 in combined income. Even at the 85% inclusion level, at least 15% of your benefit remains federally tax-free.
Claiming Florida Requires More Than a Home There
Owning property in Florida or spending winters there is not enough to shift your tax domicile. If you’re moving from a state that taxes pensions, that state may audit your residency claim, especially if your income is high. Losing the fight means your former state continues to tax your pension as if you never left.
Florida law lets you formally declare domicile by filing a sworn statement with the clerk of the circuit court in your county of residence, declaring that you maintain a permanent home there and intend to keep it as your principal residence.5The Florida Legislature. Florida Statutes 222.17 – Manifesting and Evidencing Domicile in Florida The declaration alone doesn’t bind another state, but it creates an official record.
The stronger evidence is behavioral. Get a Florida driver’s license. Register to vote in Florida. Register your vehicles in the state. File your federal tax return from your Florida address. Have pension and investment statements mailed to your Florida home. Update estate planning documents to reflect Florida residency. Sever ties with the former state where you can: close bank accounts, drop club memberships, surrender safe deposit boxes.
If you keep a home in both states, the risk of a domicile challenge climbs. New York, California, and New Jersey are known for aggressive residency audits. Keep detailed records of where you spend your days if you split time.
The Trade-Off: Sales and Property Taxes
Without an income tax, Florida leans on consumption and property taxes to fund its government. The base state sales tax is 6%, and most counties add a discretionary surtax that can push the combined rate as high as 8%.6Florida Department of Revenue. Florida Sales and Use Tax Unprepared groceries and prescription medications are exempt, which helps on a fixed income. Most other purchases and many services are taxed.
Property tax is assessed locally and varies significantly by county. It’s often the largest ongoing tax expense for Florida homeowners. The state’s homestead exemption can reduce your home’s taxable value by up to $50,000 if the property is your permanent residence. The first $25,000 applies to all property taxes including school district levies; an additional exemption of up to $25,000 applies to assessed value above $50,000, and only for non-school taxes.7Florida Department of Revenue. Homestead Property Tax Exemption (PT-113)
Florida’s Save Our Homes provision caps annual increases in your homestead’s assessed value at 3% or the inflation rate, whichever is lower.8Florida Department of Revenue. Save Our Homes Assessment Limitation and Portability Transfer Over time this can create a large gap between assessed and market value, particularly in fast-appreciating areas. If you sell and buy another Florida home, you can port up to $500,000 of accumulated savings to your new property’s assessment. Apply for the homestead exemption by March 1 of the tax year to receive the benefit for that year.
No Estate or Inheritance Tax
Florida imposes no estate tax and no inheritance tax. The state’s estate tax formally ended for deaths on or after January 1, 2005, after the federal government replaced the state death tax credit with a deduction.9Florida Department of Revenue. Florida Department of Revenue Estate Tax Your heirs will owe Florida nothing on what they inherit from you.
Federal estate tax is a separate question. For 2026, the federal estate and gift tax exemption is $15 million per person, after legislation made the higher exemption levels from the 2017 tax law permanent.10Internal Revenue Service. What’s New – Estate and Gift Tax Most retirees fall well below that threshold. Estates above it face rates up to 40% on the excess.