Retirement planning for Pennsylvania.

Flat 3.07%. Start with your situation

Pennsylvania at a glance (2026)

Top combined rate: 40.07%
State tax model: Flat 3.07%
Standard deduction: $16,100
RMD start age: 73

No state income tax

Pennsylvania does not levy a state income tax. Your 401(k)/IRA withdrawals, Roth conversions, Social Security, and investment gains are taxed only at federal rates (10-37%).

Pennsylvania retirement planning insights

Pennsylvania does not tax most retirement income. Distributions from IRAs, 401(k)s, pensions, and Social Security are all exempt from the 3.07% state flat tax once you reach retirement age
This makes Pennsylvania one of the most tax-friendly states for retirees despite having a state income tax. The exemption on retirement distributions is effectively a 0% state rate on the income that matters most
Pennsylvania's flat 3.07% still applies to earned income, interest, dividends, and capital gains. Retirees with significant non-retirement investment portfolios still face state tax on those sources
The combination of retirement income exemption + relatively low property taxes (outside Philadelphia) makes Pennsylvania a hidden gem for tax-efficient retirement, especially for retirees relocating from NY or NJ

Frequently asked questions

Does Pennsylvania tax 401(k) and IRA withdrawals?

No. Pennsylvania exempts distributions from IRAs, 401(k)s, 403(b)s, and most pensions from state income tax. Social Security is also exempt. This makes PA effectively a 0% state tax state for most retirement income, despite having a 3.07% flat tax on earned income.

Is Pennsylvania a good state to retire in?

For tax purposes, it's one of the best-kept secrets. The retirement income exemption means most retirees pay zero state income tax. Combined with no sales tax on groceries/clothing and moderate property taxes outside Philly, the total tax burden is very competitive with no-income-tax states like Florida or Texas.

Other states

Start with a Pennsylvania situation.

Turn your income, spending, savings and one life event into a retirement timeline.

Start with your situation