How Does My State Tax My IRA distribution?
Many states exempt IRA distributions from tax but not all
Many farmers have built up large amounts in retirement plans or individual retirement accounts (IRAs). How are these distributions taxed in their state when they finally start taking distributions from these accounts. We know in most cases, the IRS will tax these distributions as ordinary income, but each state has their own rules.
Let’s review how each state taxes IRA distributions.
Category 1: States with No Income Tax
In these states, there is no state income tax, meaning taxpayers do not pay state taxes on IRA distributions.
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming
