Florida does not tax most retirement income, including Social Security, pensions, and withdrawals from retirement accounts

Florida has no state income tax, which means the state does not tax wages, investment income, or retirement withdrawals. This applies to Social Security benefits, traditional and Roth IRA withdrawals, 401(k) distributions, pension payments, and annuity income. You will still owe federal income tax on most of these sources — that is a federal requirement, not a Florida one — but Florida itself takes nothing.

The one exception is interest and dividends earned on money held in taxable accounts (not retirement accounts). Florida does not tax those either. The state funds itself through sales tax, property tax, and corporate taxes instead.

Key Takeaways

  • Florida imposes no state income tax on retirement income of any kind, including Social Security, pensions, IRAs, and 401(k) withdrawals.
  • You still owe federal income tax on most retirement income, even though Florida does not tax it.
  • Interest and dividends from taxable investment accounts are also not taxed by Florida.
  • Some states tax retirement income and some do not; if you are moving to Florida, this can significantly reduce your tax burden.

What counts as retirement income in Florida

Retirement income includes any money you receive after you stop working or reach a certain age. Social Security benefits, pension payments from a former employer, distributions from a traditional IRA or 401(k), Roth IRA withdrawals, and annuity payments all fall into this category. Florida does not tax any of these.

If you have a part-time job or self-employment income in retirement, Florida does not tax that either. However, you will still owe federal self-employment tax if you are self-employed, and you may owe federal income tax depending on how much you earn.

Federal taxes you still have to pay

Even though Florida does not tax retirement income, the federal government does. Social Security benefits may be taxable at the federal level if your combined income exceeds certain thresholds — the IRS counts half your Social Security plus all other income to determine this. Traditional IRA and 401(k) withdrawals are taxed as ordinary income by the federal government. Roth IRA withdrawals are generally not taxed if you have held the account for at least five years and are over 59½.

Pension income is taxed by the federal government as ordinary income. You will receive a 1099-R form from your pension provider showing how much you withdrew that year. When you file your federal return, you report this amount and pay tax based on your federal tax bracket.

The federal tax you owe depends on how much retirement income you have and whether you have other sources of income. A tax professional or the IRS website can help you estimate what you will owe.

How to report retirement income on your taxes

You do not file a Florida state income tax return because Florida has no income tax. You only file a federal return with the IRS. On that return, you report all retirement income — Social Security, pensions, IRA withdrawals, and any other sources.

Your financial institutions and pension providers send you tax forms in January showing what you received. Social Security sends a 1099-SSA form. Pension and IRA providers send 1099-R forms. Banks and investment firms send 1099-INT (interest) and 1099-DIV (dividends) forms. You use these forms to fill out your federal return or provide them to a tax preparer.

Moving to Florida for tax reasons

Some people move to Florida specifically because of the lack of state income tax. If you are retiring and moving from a state that taxes retirement income, you may pay significantly less in taxes overall. However, Florida has other taxes to consider: sales tax is 6 percent statewide (some counties add more), and property tax varies by county but averages around 0.8 percent of home value annually.

If you are moving to Florida, check whether your former state taxes retirement income and how much you currently pay. Compare that to Florida's sales tax and property tax to see whether the move makes financial sense for your situation. Some states tax pensions but not Social Security, or tax IRAs but not pensions — the rules vary widely.

Special situations and exceptions

Military retirement pay is not taxed by Florida, just as civilian retirement income is not. If you receive a lump-sum distribution from a pension or 401(k) when you leave a job, Florida does not tax it, though the federal government may. If you inherit a retirement account, the rules depend on your relationship to the person who left it to you and the type of account — this is complex, and a tax professional can advise you.

If you work part-time in retirement and earn wages, Florida does not tax those wages. However, you will owe federal income tax and federal payroll taxes (Social Security and Medicare) on wages, just as you would in any state.

Frequently Asked Questions

Do I have to file a Florida tax return if I live there?

No. Florida has no state income tax, so there is no Florida tax return to file. You only file a federal return with the IRS if your income is above the threshold for your filing status.

Will I owe taxes on my Social Security if I move to Florida?

Florida does not tax Social Security, but the federal government may. Whether you owe federal tax on Social Security depends on your combined income — the IRS counts half your Social Security plus all other income. If that total exceeds certain thresholds, part of your benefit is taxable at the federal level.

What if I receive a pension from another state?

Florida does not tax pension income, regardless of which state or employer it comes from. You will still owe federal income tax on the pension, but Florida takes nothing.

Are there any retirement income sources that Florida does tax?

No. Florida does not tax any form of retirement income — Social Security, pensions, IRAs, 401(k)s, annuities, or any other source. The state has no income tax at all.

If I move to Florida, when does the tax benefit start?

As soon as you become a Florida resident, you stop owing Florida state income tax. Your former state may tax you through the end of the year you move, depending on its rules. Check with your former state's tax agency about how they handle mid-year moves.