No state income tax
How Nevada taxes retirement income
Nevada has no personal income tax, so the state takes nothing from your Social Security, your pension or your withdrawals from a 401(k), 403(b), 457(b) or IRA. That holds no matter where the pension comes from: a Nevada plan, another state’s teacher system, a company pension or the federal government.
Nevada relies heavily on sales tax and taxes tied to tourism. Property tax increases on a primary home are capped each year, which keeps bills more predictable for retirees.
Federal income tax still applies everywhere. Your pension and traditional retirement account withdrawals are taxed by the IRS as ordinary income, and up to 85% of your Social Security can be taxable federally depending on your other income.
Questions
Does Nevada tax pensions?
No. Nevada has no personal income tax, so pensions of every kind are free of state tax.
Does Nevada tax Social Security?
No. With no income tax, Social Security benefits are not taxed by the state.
If I move to Nevada, can my old state still tax my pension?
No. Federal law (4 U.S.C. 114) bars states from taxing the pension income of people who no longer live there, including government pensions and most retirement plan payments.