Pennsylvania retirement income tax (2026)

How Pennsylvania taxes retirement income

Pennsylvania taxes income at one flat rate, 3.07%, whatever the amount and filing status^[1].

The simulator applies no standard deduction or personal exemption, so the rate applies from the first dollar of income that is not excluded.

Social Security benefits are exempt from Pennsylvania income tax: none of the benefit enters the state base, as in 22 of the 24 states covered here that tax income.

IRA, 401(k) and pension distributions are fully excluded once a person is 60 or older; before that age they are taxed like other income. For a retiree past 60, that leaves mainly wages and investment income in the Pennsylvania base.

Long-term capital gains and qualified dividends are taxed as ordinary income, at the same rates.

Put together, the example couple below owes $0 in Pennsylvania, the lowest bill among the 24 states covered here that tax income, shared with 7 other states.

2026 rate

One rate, 3.07%, applies to all taxable income for every filing status; there are no brackets.

Worked example

A retired couple, both 67, filing jointly, with $48,000 of Social Security, $40,000 of IRA withdrawals and a $20,000 pension. The figures are computed when the page is built, by the same state-tax function the simulator runs.

The couple’s next $1,000 of IRA withdrawals would add $0 of Pennsylvania tax.

A single retiree, 67, with half those amounts ($24,000 of Social Security, $20,000 of IRA withdrawals, a $10,000 pension) owes $0, 0.00% of gross income.

Age matters here: if both spouses were 58, below the exclusion age of 60, the same income would owe $1,842, which is $1,842 more than at 67.

As IRA withdrawals rise

The same couple, with Social Security and the pension unchanged, taking more from their IRAs (a larger withdrawal, a required minimum distribution or a Roth conversion all count as distributions here):

Neighbouring states

The example couple’s state tax in Pennsylvania and in the neighbouring states covered here, same income and ages:

Against Pennsylvania, the couple would pay more in New York (+$154), New Jersey (+$1,001), Maryland (+$2,235), Ohio (+$1,134). With $200,000 of IRA withdrawals instead of $40,000, they would owe $0 in Pennsylvania, against New York ($8,533), New Jersey ($9,844), Maryland ($10,063), Ohio ($5,534).

What this page leaves out

What the simulator does and does not handle for Pennsylvania, item by item^[1]:

• Flat 3.07% on income classes with no standard deduction or exemptions.
• Social Security exempt.
• Distributions from eligible retirement plans (401(k)/IRA/pension) fully exempt after retirement age (59½, modeled as 60+).
• Early distributions taxed (approximated by the age gate).

In every state the simulator also leaves out credits, itemized deductions, deductions that phase out with income, local income taxes, surtaxes and any deduction for federal tax paid. It holds state amounts fixed and does not index them for inflation.

See it over a full plan

Related

• All 33 states compared
• State taxes in retirement: the exemptions that change the map
• The Social Security tax torpedo
• The RMD bomb: how pre-tax savings become forced income
• Roth ladder: how a Roth conversion ladder works
• Taxes in retirement: the topic guide
• Marginal-rate map (federal and state tax on the next dollar)