No state income tax
How Washington taxes retirement income
Washington 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 Washington plan, another state’s teacher system, a company pension or the federal government.
Washington does tax very large long-term capital gains from selling stocks and other assets, but that tax does not apply to retirement accounts, pensions or Social Security. Sales and property taxes are the main costs to plan for.
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 Washington tax pensions?
No. Washington has no personal income tax, so pensions of every kind are free of state tax.
Does Washington tax Social Security?
No. With no income tax, Social Security benefits are not taxed by the state.
If I move to Washington, 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.