State Income Tax
: 2.2% to 6.75% State Sales Tax
: None Estate Tax/Inheritance Tax
The First State is number one with many retirees, thanks to low real estate taxes, modest income taxes and no sales taxes. In fact, its highway billboards welcome visitors to the "home of tax-free shopping." Social Security benefits are exempt from income taxes, and residents 60 and older can exclude $12,500 per person of qualified pension benefits and investment income, including dividends, interest and capital gains, from income taxes. Income tax rates on remaining income range from 2.2% to 6.75%, with the top rate kicking in for both individuals and married couples when income reaches $60,000. Residents 65 and older who do not itemize their deductions are eligible for an additional standard deduction of $2,500. Real estate taxes vary by county but are generally low, and homeowners 65 and older qualify for a credit against school taxes of up to $500.
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: Kiplinger’s State-by-State Guide to Retiree Taxes 10 Things You Must Know About Social Security 12 Smart Year-End Tax Moves for 2012 The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.