Florida Retirement Tax Guide (2026)

What Florida does not tax (a long list)

• Social Security benefits — fully exempt from state tax.
• Pensions (private, federal, military, state) — fully exempt from state tax.
• Traditional IRA distributions — fully exempt from state tax.
• 401(k) and 403(b) withdrawals — fully exempt from state tax.
• Roth conversions and Roth withdrawals — fully exempt from state tax.
• Capital gains (long-term and short-term) — no state-level tax.
• Dividends and interest — no state-level tax.
• Estate and inheritance — no state-level estate or inheritance tax.

Federal taxation of all the above is unchanged. Florida residency does not affect your federal return — it eliminates only the state-level layer.

A typical retirement income picture, with and without Florida

Consider a retired couple drawing $40,000 of combined Social Security, $30,000 from traditional IRAs, $20,000 from a pension, and $10,000 of long-term capital gains — total $100,000 of gross retirement income.

In Florida (MFJ): federal tax of roughly $4,500–$5,500 (depending on the SS-taxable portion). State tax: $0. Total tax: ~$5,000.

In California (MFJ): federal tax similar. CA state tax on the IRA, pension, and capital-gains portions runs roughly $2,500–$3,500.

In New York (MFJ): NY excludes Social Security and offers a $20,000 retirement-income exclusion per recipient, but still taxes the remaining IRA and pension income above the exclusion. NY state tax in this scenario is roughly $1,500–$2,500.

For a higher-income retiree drawing $250,000+ per year (substantial taxable retirement portfolio plus Roth conversions), the gap between Florida and California or New York can exceed $15,000 per year — compounding to several hundred thousand dollars over a 20-year retirement.

Property tax for retired homeowners

Florida property tax runs at the county level, generally 1.6%–2.2% of assessed value before the homestead exemption. For owner-occupants, the homestead exemption removes $50,000 from assessed value (the first $25,000 from all taxes; the second $25,000 from non-school taxes). It also activates the Save Our Homes 3% annual assessment cap — which, for a long-held primary residence, can produce a substantial gap between market value and assessed value over time.

Florida also offers an additional senior homestead exemption in many counties (income-limited, $25,000–$50,000 additional), and a long-term-residency exemption for seniors in some counties. Check with your county property appraiser for the exact rules.

Estate planning considerations

Florida has no estate or inheritance tax. For retirees relocating from Massachusetts ($2M state estate-tax threshold), Oregon ($1M), Washington ($2.193M), or any of the dozen-plus other estate-tax states, Florida residency at death substantially reduces the state-side estate-tax exposure.

Florida is also a favorable jurisdiction for asset-protection planning. Florida\'s homestead protection (Article X, §4 of the Florida Constitution) shields the primary residence from most creditor claims, with very limited exceptions. This is among the strongest homestead protections in the United States.

When does Florida retirement residency stop being worth the move?

The cases where the math is least clean: low-income retirees (under $40K total) from low-tax states; retirees moving to coastal Florida and absorbing $5,000–$10,000/year in property-insurance increases; and dual-residency households whose primary financial life remains in a high-tax state and are exposed to that state\'s residency audits.