Nevada Retirement Taxes: What Retirees Actually Pay

The short answer

Nevada has no state income tax at all. That means every dollar you take out of a traditional IRA, 401(k), 403(b), TSP, or pension is only taxed at the federal level — the state takes nothing. Social Security benefits are likewise free of state tax.

What isn't taxed in Nevada

• Social Security benefits
• 401(k), 403(b), and TSP withdrawals
• Traditional and Roth IRA distributions
• Public and private pensions (including military and federal)
• Annuity income
• Capital gains and investment income
• Wages and self-employment income

What Nevada does tax

Revenue comes from sales tax (about 8.375% in Clark County) and property tax. Nevada property tax is capped by law — most homeowners see 3% annual increases at most — and the effective rate averages around 0.55%, well below the national average.

How Nevada compares

A retiree pulling $80,000/year from a traditional IRA saves roughly:

• California: ~$5,000–$7,000/year in state income tax avoided
• Oregon: ~$6,000/year avoided
• New York: ~$4,000/year avoided (private pensions are partially exempt there)
• Minnesota: ~$5,000/year avoided

Over a 25-year retirement, that's often the difference between running out of money and leaving a legacy.

Establishing Nevada residency

To claim the tax benefits, Nevada has to be your legal domicile — not just a second home. Steps most retirees take: get a Nevada driver's license, register to vote in Nevada, spend more than 183 days in-state, and file a part-year return in the state you left. Your old state may audit the exit, especially California, so keep documentation.

Planning around no state tax

Because Nevada takes nothing, this is one of the best states in the country to do a Roth conversion. You only owe federal tax on the conversion — no state tax on top. Same logic applies to timing large IRA withdrawals, exercising stock options, or realizing capital gains.