Does Pennsylvania tax retirement income?

Does Pennsylvania tax Social Security?

Pennsylvania does not tax Social Security benefits.

Social Security and Railroad Retirement benefits are not taxable income in Pennsylvania at all.

Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.

Are pensions taxed in Pennsylvania?

Pensions are not taxed once you’re eligible to retire under the plan and do retire.

Commonly recognized pension, old-age or retirement benefits paid after you become eligible to retire, and retire, are not taxable. All distributions from Pennsylvania SERS, PSERS and PMRS and federal civil service annuities are exempt, and so are out-of-state government and private pensions that meet the rules. Payments before you meet the plan’s age or service requirements are taxable to the extent they exceed contributions already taxed, and early-retirement incentive payments count as taxable pay.

Public vs. private pensions: Treated the same: exempt after retirement eligibility.

Are IRA and 401(k) withdrawals taxed in Pennsylvania?

IRA withdrawals at 59½ or later and 401(k), 403(b) and 457 payouts after retirement eligibility are not taxed.

Before 59½, the part of an IRA withdrawal above contributions already taxed is taxable, and Pennsylvania has none of the federal exceptions. Contributions to IRAs and 401(k)s were never deductible in Pennsylvania, so that money comes back tax-free.

Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.

Is military retirement pay taxed in Pennsylvania?

Military pensions and uniformed-service retired or retainer pay are not taxed.

What is Pennsylvania’s income tax rate?

A flat 3.07%.

A flat 3.07% on Pennsylvania taxable income since 2004. Local earned income taxes apply only to earned income, not retirement income.

Standard deduction and exemptions

None — Pennsylvania has no standard deduction or personal exemption.

What tax breaks do seniors get in Pennsylvania?

The retirement-income exemption is the main benefit. Tax Forgiveness (Schedule SP) helps low-income households, and the Property Tax/Rent Rebate program covers people 65+ (we did not verify their 2026 income limits).

What changed for 2026?

We found no enacted 2026 change; the rate has been 3.07% since 2004. Pennsylvania doesn’t use federal AGI, so the federal $6,000 senior deduction has no effect.

The 3.07% rate has applied since 2004; rules come from the 2025 PA-40 instructions.