If you’re retired or planning retirement in Mississippi, the state is considered relatively tax-friendly for retirees.
Mississippi does not tax most retirement income, including pensions and qualified retirement account distributions.
You can feel reassured knowing that many common sources of retirement income are fully exempt from Mississippi state income tax.
Mississippi Income Tax Overview
Mississippi has been transitioning its income tax structure in recent years. For 2026, the state applies a simplified rate structure to taxable income.
However, most retirement income is excluded from taxable income before rates are applied.
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Social Security Benefits
Mississippi does not tax Social Security benefits.
This means:
• Social Security retirement benefits are fully exempt
• Social Security disability benefits are fully exempt
Even if a portion is taxable federally, it is not taxed at the state level.
Example:
If you receive $30,000 in Social Security benefits, none of that amount is taxed by Mississippi.
Pension Income
Mississippi does not tax qualified pension income.
This includes:
• Private employer pensions
• Government pensions
• Federal civil service pensions
• Military retirement pay
As long as the income qualifies as retirement income under Mississippi law, it is exempt from state income tax.
IRA Withdrawals
Mississippi does not tax qualified retirement account distributions.
This includes:
• Required Minimum Distributions
• 403(b) distributions
As long as the distribution is considered retirement income and not an early distribution penalty situation, it is generally exempt.
Roth IRA qualified distributions are also not taxed.
What Income Is Still Taxed?
While retirement income is largely exempt, Mississippi still taxes:
• Wages and salaries
• Business income
• Rental income
• Interest and dividends
• Capital gains
If you continue working in retirement or have non-retirement investment income, those amounts may be taxable.
Mississippi Income Tax Rates — 2026
Mississippi applies the following structure to taxable income:
| Tax Rate | Taxable Income |
|---|---|
| 0% | $0 to $10,000 |
| 4% | Over $10,000 |
Only income above $10,000 is taxed at 4%.
Because most retirement income is excluded, many retirees may have little or no taxable income subject to these rates.
Marginal vs Effective Rate
If you have taxable income above $10,000:
• Your marginal rate is 4%
• Your effective rate will be lower depending on your total income
Retirees whose income consists primarily of pensions, IRAs, and Social Security often have little taxable income at the state level.
Planning Considerations
• Social Security is fully exempt
• Pension and qualified retirement account income is exempt
• Working income remains taxable
• Investment income outside retirement accounts is taxable
• Large retirement withdrawals do not increase the Mississippi state income tax
Mississippi can be especially favorable for retirees who rely primarily on retirement accounts and Social Security.
💻 Electronic Filing Recommendation
E-filing your Mississippi return is recommended:
• Automatic application of retirement income exclusions
• Proper calculation of taxable income
• Reduced math errors
• Faster processing
Tax software ensures retirement income is correctly excluded from Mississippi taxable income.
Final Thoughts
Mississippi does not tax Social Security, pensions, or qualified IRA and 401(k) distributions in 2026.
Only non-retirement income above $10,000 is taxed at 4%. For many retirees, this results in little or no Mississippi state income tax.
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| Take advantage of this offer and save 10% on TurboTax Electronic Tax Filing! |
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