How PENNSYLVANIA Taxes Retirees (Blog)

Pennsylvania is very good to its retirees in terms of the taxes they pay.

In fact, ALL retirement income is excluded from taxation!

So, just say you have $40k in Social Security and $60k in IRA, pension and 401k distributions. You will pay 0 in tax. That is a big, fat Goose Egg, my friends.

Now, you may think PA has a high sales tax. And you’d be wrong. The state plus local sales tax rate puts PA in the bottom third of all the US for sales tax.

Lastly, the property tax rate is pretty high at around 1.50%. There is not much of a homestead exemption either. But the median property value in Pennsylvania is not extraordinarily high either. So, while you pay a high percentage, relative to the rest of the US, the total dollar you pay is closer to the middle of the average US state

From an income tax perspective alone, PA is very favorable for retirees. Moderately low sales tax add to the allure. The property tax is a bit high but nothing that should drive you away from the great Commonwealth of PA.

See video here.

© Copyright 2018 Heritage Wealth Planning