State retirement taxes · 2026
Does South Dakota tax retirement income?
Short answer: No. South Dakota has no income tax, so Social Security is not taxed. There is no individual income tax; the state relies on sales and use taxes.
What’s taxed in South Dakota
2026 rules.
- Social SecurityNot taxed
- South Dakota has no income tax, so Social Security is not taxed.
- PensionsNot taxed
- Pensions are not taxed — South Dakota has no income tax.
- IRA & 401(k) withdrawalsNot taxed
- IRA and 401(k) withdrawals are not taxed.
- Military retirement payNot taxed
- Military retirement pay is not taxed.
- Income tax rateNone
- No individual income tax.
Does South Dakota tax Social Security?
South Dakota has no income tax, so Social Security is not taxed.
The South Dakota Department of Revenue confirms the state does not impose a state income tax.
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 South Dakota?
Pensions are not taxed — South Dakota has no income tax.
Public and private pensions owe no state income tax.
Are IRA and 401(k) withdrawals taxed in South Dakota?
IRA and 401(k) withdrawals are not taxed.
With no income tax, withdrawals and required minimum distributions owe no state tax.
Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.
Is military retirement pay taxed in South Dakota?
Military retirement pay is not taxed.
What is South Dakota’s income tax rate?
South Dakota has no broad income tax.
No individual income tax. State revenue comes from sales and use and other taxes.
What tax breaks do seniors get in South Dakota?
Not applicable to income tax. Property-tax relief programs exist but are not covered here.
What changed for 2026?
We found no enacted income tax changes for 2026–2028.
South Dakota does not impose a state income tax.
How South Dakota compares with its neighbors
Thinking of moving across the line? Here’s how each bordering state treats retirement income in 2026.
- South DakotaThis pageTax-free retirement incomeSocial Security Not taxedTop rate: None
- IowaVery friendlySocial Security Not taxedTop rate: 3.8% flat
- MinnesotaLess friendlySocial Security Partly taxedTop rate: 9.85% top
- MontanaLess friendlySocial Security TaxedTop rate: 5.65% top
- NebraskaFriendlySocial Security Not taxedTop rate: 4.55% top
- North DakotaFriendlySocial Security Not taxedTop rate: 2.5% top
- WyomingTax-free retirement incomeSocial Security Not taxedTop rate: None
State tax is half the picture — check the federal side
South Dakota retirement tax questions
Does South Dakota tax Social Security or pensions?
No. South Dakota has no income tax, so Social Security is not taxed. The South Dakota Department of Revenue confirms the state does not impose a state income tax.
Are IRA withdrawals and RMDs taxed in South Dakota?
No. IRA and 401(k) withdrawals are not taxed. With no income tax, withdrawals and required minimum distributions owe no state tax.
Is South Dakota tax-friendly for retirees?
We rate South Dakota “Tax-free retirement income” for 2026. There is no individual income tax; the state relies on sales and use taxes. Our rating covers state income tax only — not property or sales taxes, which can still matter.
Is military retirement pay taxed in South Dakota?
No. Military retirement pay is not taxed.
Sources for South Dakota
Primary sources only. We re-check them whenever an agency publishes new figures.
- State
- State
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