The 7 States With Tax Laws That Could Slam Retirees (Blog)

Thinking about rolling over your pension to an IRA in Alabama?  You might want to read this.

Thinking about NOT rolling over your 401k to an IRA in Utah?  Probably should read this.

Forgetting to keep track of your employer contributions to your retirement plans in Hawaii? Yikes. Read

These are just 3 of the odd rules that could creep up on you if you aren’t prepared.

In my 50 video marathon of how each state taxes retirees I came up with 7 very unique tax rules that can set you back if you are unaware.


Pensions are exempt from tax. The state literally could not be clearer when they say “For tax years beginning January 1, 1991, any benefits received from a defined benefit plan are not taxable. “

So if you’re thinking about rolling over your pension to an IRA – DON’T!  See here.

HAWAII Tax Quirk

“If an employee invests his or her money in a tax-deferred annuity or an individual retirement account (IRA), a distribution from the annuity or from the IRA is considered to be a return from an individual investment and is not considered to be an excluded pension.”
Yet your employer contribution ARE excluded. So, keep track of each!  See here.


Retirement plan distributions qualify for large exemptions except:
” All distributions from 457 plans
Distributions from 401(k) or 403(b) plans sourced to employee contributions and the earnings from those contributions if the contributions were not matched by the employer”
Again, like in Hawaii, keep track of your employer contributions.  See here.


If your AGI is below $32k(MFJ) your pension is not taxed.
No way to get your AGI that low, you say? You haven’t been following my channel long have you?


IRAs, even ROTH IRAs, are fully taxed. Whereas ALL other retirement income qualifies for HUGE exemptions. See here.


If you are MFJ and AGI is below $100k you can $15k of retirement income per person tax free…as long as that retirement income is NOT an IRA.  See here.

UTAH Tax Quirk

You can qualify for a $900 retirement tax credit within certain income limits as long as your retirement income is NOT from a 401k or 457 plan. See here.

Remember, tax laws change every year. Kentucky, for instance, just lowered their exemption amount by overriding the Governor’s veto. Rhode Island just enacted there new rules in 2017.

You’ve got to keep track of this stuff or else it really could cost you.

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