Is Retirement Income Taxed in Mississippi?

Mostly, no. Mississippi does not tax Social Security, and it does not tax pensions, annuities, or 401(k) and IRA withdrawals once you have met your plan's retirement requirements. The word doing the work in that sentence is once. Take the money early and the state may treat it as ordinary income, and that is where retirees get surprised.

This guide is informational only and is not tax advice. The rules and figures here were verified against the Mississippi Department of Revenue in September 2026. Confirm them for your tax year and your plan before acting.

What Mississippi does not tax

The Department of Revenue's individual income tax FAQ puts it directly:

“Mississippi does not tax benefits received from U.S. Social Security, Railroad Retirement Public Welfare assistance, Veterans' Administration payments or workers' compensation.”

And on pensions and retirement accounts:

“Generally, retirement income, pensions and annuities are not subject to Mississippi Income tax if the recipient has met the retirement plan requirements. Early distributions are not considered retirement income and may be subject to tax.”

Source: Mississippi DOR, Individual Income Tax FAQs (opens in new tab), checked September 2026.

That is broader than many states. It is not limited to defined-benefit pensions: a 401(k), 403(b) or IRA distribution taken after you have met the plan's retirement requirements falls under the same sentence. For a retiree living on Social Security and qualified retirement distributions, Mississippi's income tax can be close to nothing.

The catch: early distributions

Read the second DOR sentence again. Early distributions are not considered retirement income and may be subject to tax. The exemption is for money that comes out as retirement income. Money that comes out before you have met the plan's retirement requirements is something else in the state's eyes, and it can land on your Mississippi return as taxable income at the regular rate: 4.4% for tax year 2025, 4.0% for tax year 2026, on taxable income over $10,000.

This is the whole point of the page. Someone who leaves a job at 55, pulls from a 401(k) to cover the gap, and assumes “Mississippi doesn't tax retirement” can end up owing state tax on every dollar of it. The same dollars, taken a few years later as a qualified distribution, might have been exempt. The timing is the tax.

What “qualified” means, honestly

The DOR's test is whether “the recipient has met the retirement plan requirements.” The FAQ does not define that phrase further, and this page is not going to invent a definition for it. In plain English, the question is whether your own plan—its retirement age, its service requirements, whatever terms it sets for a normal retirement distribution—treats what you took as a retirement distribution rather than an early one.

Because that turns on your plan's terms and your facts, not on a single statewide number, it is exactly the question to put to a CPA before you take a distribution, not after. Bring the plan document or summary plan description. The answer decides whether the money is exempt or taxed, and there is no version of that question a website can settle for you.

The 65-and-over exemption, and the small standard deduction

Two figures from the Department of Revenue's Tax Rates page matter for retirees whose income is not all exempt. These are the amounts published as of September 2026; check the page for your tax year.

Source: Mississippi DOR, Tax Rates (opens in new tab) and Individual Income Tax FAQs (opens in new tab), checked September 2026.

The extra $1,500 for taxpayers 65 and older is a real if modest benefit. The standard deduction is the more surprising number: $2,300 for a single filer is a fraction of the federal standard deduction. A retiree with property tax, mortgage interest or medical costs may find that itemizing on the Mississippi return pays even when the federal return takes the standard deduction. Software defaults do not always catch that.

A worked illustration

This is a hypothetical illustration, not advice. It uses only the tax year 2026 rate and the DOR figures above, ignores itemized deductions and every federal question, and assumes the retirement income is fully qualified. Real returns have more moving parts.

Take a single Mississippi resident, age 67, in tax year 2026, with Social Security, a monthly pension, and $30,000 of wages from a part-time job:

Illustration only. Rate and amounts from Mississippi DOR, Tax Rates (opens in new tab), tax year 2026, checked September 2026.

Now change one fact. Suppose the same person had instead taken an early distribution from a retirement account that does not meet the plan's retirement requirements. Per the DOR, that distribution may be subject to tax. If it is, every $10,000 of it above the exempt bracket adds $400 at the 2026 rate. The Social Security and the qualified pension stay exempt either way. The exemption never went away; it just never applied to that withdrawal.

When a retiree still needs a CPA

If your income is Social Security plus qualified distributions and nothing else, your Mississippi return is simple and may not be required at all. The fee is earned when something else is on the return:

• Part-time or consulting work. Wages and self-employment income are taxed at the regular rate, and self-employment brings its own filings.
• Rental income. Taxable, with depreciation and expense questions that software handles poorly for first-time landlords.
• Any early withdrawal. Before you take it, not after. Whether it is qualified under your plan is the entire question.
• Moving to Mississippi. The year you arrive is a part-year return in two states, and the state you left may treat the same retirement income very differently.
• Splitting time between states. Residency is a question of facts, and the answer decides which state's rules apply to every dollar.
• Itemizing on the state return. With a $2,300 single standard deduction, it is worth checking every year.

Every CPA listed on this site is on the active roster of the Mississippi State Board of Public Accountancy (opens in new tab). You can browse by city, get matched, or read what a Mississippi CPA typically charges first. If you are also tracking the state's rate cuts, see the year-by-year rate schedule.

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