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Tennessee Retirement Taxes

No state income tax · no state income tax · property 0.52% · sales 9.61%. Plan RMDs, Roth conversions, and estate tax before retiring in Tennessee.

By Sammy S. · Founder · AuthorUpdated for 2026

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Tennessee retirement taxes snapshot

No state wage income tax on retirement income; no state estate or inheritance tax. Rank #1 on this site's retiree-friendliness score (#1 is most favorable).

Social Security

No state income tax

Federal rules still apply

Retirement income

No state income tax

Pensions / IRA / 401(k)

Estate / inheritance

No state estate/inheritance tax

Federal exempt ~$15M

Retiree rank

#1

Lower score = more friendly

Compare Tennessee with another state

Compare any two states

Social Security, pensions/IRA, estate taxes, and supporting property/sales rates.

Does Tennessee tax Social Security?

No state income tax

Tennessee has no broad state income tax, so Social Security is not taxed at the state level. Federal tax rules still apply.

Federally, up to 85% of Social Security can be taxable based on combined income. State treatment is a separate layer on top of IRS rules.

How Tennessee taxes pensions, IRA, and 401(k) withdrawals

No state income tax

Tennessee does not levy a broad state income tax on pensions or retirement-account withdrawals.

Federal income tax on Social Security and retirement distributions can apply regardless of state rules.

Estate and inheritance taxes in Tennessee

No state estate/inheritance tax

Tennessee does not currently levy a state inheritance tax.

Federal estate tax may still apply above about $15M for 2026, regardless of state rules.

Property and sales taxes that affect retirees in Tennessee

Income-tax savings can be offset by higher housing or consumption taxes. These are statewide benchmarks—not the exact levy on a specific home or shopping basket.

Federal vs Tennessee retirement taxes

Living in Tennessee does not remove federal tax on taxable Social Security, traditional IRA/401(k) withdrawals, capital gains, or a taxable estate above the federal exemption. Tennessee rules sit on top of IRS rules.

Federal Social Security

Up to 85% of benefits may be taxable based on combined income—same framework in every state.

Tennessee Social Security

No state income tax

Tennessee withdrawals

No state income tax

Death taxes

No state estate/inheritance tax

Before you retire in Tennessee

Confirm Social Security treatment

Tennessee has no broad state income tax, so Social Security is not taxed at the state level. Federal tax rules still apply.

Confirm pension and IRA rules

Tennessee does not levy a broad state income tax on pensions or retirement-account withdrawals.

Estimate property tax on your home

Statewide effective property tax is about 0.52%. Check local homestead or senior relief.

Budget for sales tax

Combined average sales tax is about 9.61%. Necessities may be taxed differently.

Review estate or inheritance tax

Tennessee currently has no state estate or inheritance tax; federal estate tax may still apply.

Plan Roth conversions carefully

State tax on conversions is often limited in Tennessee, but federal tax still applies.

How to read the Tennessee figures

Retiree rank

#1 on this site’s Social Security, retirement-income, and estate/inheritance score (#1 is most favorable).

Social Security badge

A planning label—not a guarantee for every AGI level or filing status.

Property & sales

Statewide benchmarks for cash-flow planning; your locality may differ.

Not modeled

Every local income tax, circuit breaker, homestead credit, or private pension nuance.

Related retirement planning tools

Social Security calculatorRMD calculatorRoth IRA calculator401(k) match

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All state rankings→Compare any two states→

Tennessee retirement tax FAQs

Tennessee has no broad state income tax, so Social Security is not taxed at the state level. Federal tax rules still apply.

Tennessee does not levy a broad state income tax on pensions or retirement-account withdrawals.

Tennessee does not currently levy a state estate or inheritance tax. Federal estate tax may still apply above the federal exemption.

Effective owner-occupied property tax is about 0.52%. Combined average sales tax is about 9.61%.

Tennessee ranks #1 on this site's retiree-friendliness score (#1 is most favorable), based on Social Security, retirement-income, and estate/inheritance treatment.

No state wage income tax on retirement income; no state estate or inheritance tax. Compare property tax, sales tax, healthcare costs, and housing before deciding.

Yes. Federal income tax on taxable Social Security, IRA/401(k) withdrawals, capital gains, and the federal estate tax framework still apply.

Use the pair selector on this page to compare Social Security treatment, retirement-income rules, estate/inheritance indicators, and supporting property and sales rates.

No. Federal taxability of Social Security depends on combined income under IRS rules, not on your state of residence. State tax is an additional layer.

Tennessee generally does not tax qualified retirement distributions as ordinary state income in this model, so state tax on a Roth conversion is typically limited—but federal tax still applies. Confirm current Tennessee instructions.

Confirm Social Security treatment, pension/IRA exclusions, property-tax homestead or senior relief, sales-tax rates on necessities, and whether Tennessee has an estate or inheritance tax. Local income taxes may also apply.

Tennessee has no broad state income tax, so RMDs are not taxed as state income. Federal income tax on traditional IRA/401(k) RMDs still applies.

Confirm current Tennessee return instructions and local rules. Rankings are educational planning aids.