Are inherited IRA withdrawals always taxed by my state?

No. State treatment varies. Some states do not impose a broad individual income tax, some generally tax federally taxable IRA distributions, and others provide retirement-income or death-benefit exclusions. Your federal Form 1099-R is a starting point, not the final state answer. Check the current return instructions from the revenue agency for the state where you are resident when you receive the distribution.

Does a no-income-tax state make an inherited IRA tax-free?

No. A no-individual-income-tax state can remove the state income-tax layer, but a taxable traditional inherited IRA distribution is still generally included in federal income. Other taxes can also exist, including inheritance tax in a decedent’s state or tax on unrelated income. “No state income tax” should never be read as “no tax at all.”

Can my old state tax my IRA after I move away?

Federal law generally prohibits a state from taxing qualifying retirement income of an individual who is no longer a resident or domiciliary of that state. The hard part is proving that you actually became a nonresident under the state’s domicile rules. Part-year residency, continuing ties, and the timing of a distribution can still require careful return reporting.

Is inheritance tax the same as tax on an IRA withdrawal?

No. State income tax is generally triggered by taxable income when money is distributed. Inheritance tax is imposed because property passes at death and often depends on the beneficiary’s relationship to the decedent. A beneficiary can face an inheritance-tax question even before taking a distribution, or face state income tax in a state that has no inheritance tax.

Should I use an online 50-state rate table?

Use it only as a research lead. A static table can become stale when a state changes rates, exclusions, residency rules, or inheritance taxes. For an actual distribution, verify the current tax-year instructions from the state revenue agency. This article intentionally avoids a 50-state percentage table because false precision is more dangerous than a clear verification process.

Does Your State Tax Inherited IRA Withdrawals? A 50-State Starting Point

Yes, your state may tax an inherited IRA distribution even when the federal inherited-IRA rules are identical nationwide. The federal rules determine when money must leave the account and how much of a traditional IRA distribution enters federal gross income; state law determines whether that federally taxable amount is also taxed, excluded, deducted, or partly exempt on the state return.

The safest way to research state tax is not to memorize a 50-state rate table. Rates, exclusions, retirement-income definitions, residency rules, and inheritance taxes change. Start by placing your state into a broad category, then verify the current Department of Revenue instructions for the year in which you actually take the distribution.

Federal tax is only the first layer

A traditional inherited IRA is generally taxable federally when distributed to the extent it represents pretax contributions and earnings. IRS Publication 559 treats the taxable balance of a traditional inherited IRA as income in respect of a decedent rather than ordinary inherited property receiving a new fair-market-value basis. That federal characterization is the baseline, but a state does not necessarily copy every federal inclusion or exclusion.

Roth inherited IRAs are different because qualified Roth distributions can be federally tax-free, although beneficiary RMD and 10-year rules can still apply. Basis in a traditional IRA can also make part of a distribution nontaxable. State analysis therefore begins only after you know the federal character of the distribution.

Group one: states without a broad individual income tax

Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming do not impose a broad individual tax on ordinary retirement income in the same way most states do. New Hampshire ended its tax on interest and dividends for tax periods beginning after December 31, 2024. That does not mean every state-related tax question disappears: residency, part-year returns, estate or inheritance taxes, and taxes imposed on entities can still matter.

The practical point is narrower. If you are a bona fide resident of a no-individual-income-tax state when you receive an IRA distribution, there is generally no resident state personal income tax to add to the federal tax on that distribution. Do not confuse that with federal tax, which still applies normally.

Group two: states that generally begin with federal income

Many states start from federal adjusted gross income or another federal measure and then make state-specific additions and subtractions. In those states, a taxable traditional inherited IRA distribution commonly enters the state calculation unless a retirement-income subtraction, age-based deduction, military benefit rule, or other state modification removes some or all of it.

This is why a generic statement such as “my state taxes IRA withdrawals” is not enough. A beneficiary exclusion may depend on the decedent’s age, the beneficiary’s age, the type of retirement plan, the source of the contribution, or whether the payment is a death benefit. New York, for example, has a pension and annuity income exclusion with special beneficiary allocation rules. Pennsylvania has a very different system.

Group three: states with retirement-income exclusions or special death-benefit treatment

Some states exempt broad categories of qualifying retirement income; others provide a dollar exclusion or age-based deduction. Pennsylvania is a particularly important example because its Department of Revenue states that payments to an estate or designated beneficiary by reason of a participant’s death are not taxable compensation. New York may allow a beneficiary to use an allocated share of a decedent’s pension and annuity exclusion if the statutory conditions are satisfied.

These are not interchangeable rules. A beneficiary should read the state instructions that apply to the specific tax year and distribution code rather than importing another state’s retirement exemption.

Residency when the distribution is received can change the result

Federal law limits the ability of a former state of residence to tax qualifying retirement income paid to a person who is no longer a resident or domiciliary of that state. California expressly states that it does not tax IRA distributions received by a nonresident. This matters for a beneficiary who genuinely changes domicile during a 10-year inherited-IRA window.

But “move before you withdraw” is not a tax trick that can be reduced to a mailing address. States use domicile and residency tests involving where you actually live, maintain a home, vote, register vehicles, work, and intend to remain. A part-year move can also split a tax year. Read moving states during the inherited-IRA window before assuming a distribution has escaped the former state.

Income tax and inheritance tax are separate questions

An income tax applies when taxable income is recognized, such as when a beneficiary receives a traditional IRA distribution. An inheritance tax is imposed because property passes from a decedent to a beneficiary, typically with rates or exemptions based on the beneficiary’s relationship to the decedent. A state can have one, both, or neither.

As of 2026, the states with a separate inheritance tax are Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Iowa repealed its inheritance tax for deaths on or after January 1, 2025, although older estates can remain subject to prior law. See states with separate inheritance tax on IRAs for that second layer.

Example: one $60,000 distribution, three state outcomes

Assume Jordan receives a $60,000 fully taxable traditional inherited IRA distribution in 2026. If Jordan is a bona fide Florida resident for the entire year, Florida does not impose a broad individual income tax, so the distribution still affects the federal return but not a Florida personal income-tax return. If Jordan is a California resident, California generally taxes IRA distributions as pension income under its conformity rules, subject to California-specific adjustments. If Jordan is a Pennsylvania beneficiary receiving a qualifying death-benefit distribution, Pennsylvania guidance can exclude that payment from taxable compensation.

The federal $60,000 is the same in each example. The state result changes because the state statutes and administrative rules differ.

A practical state-tax workflow

Confirm whether the distribution is federally taxable traditional IRA income, Roth income, or partly basis recovery.
Identify your legal state of residence for the date and tax year of the distribution.
Open the current state return instructions and search for IRA, pension, annuity, retirement income, beneficiary, and death benefit.
Check whether a separate inheritance or estate tax applies because of the decedent’s domicile or property situs.
Keep the custodian Form 1099-R and any allocation worksheet required for a beneficiary exclusion.
Re-check the state rule each year before a large distribution because state statutes and forms can change.

Where to go next

For state-specific treatment, compare California inherited IRA taxes, Pennsylvania inherited IRA treatment, and New York inherited IRA taxes. Those articles keep the dollar limits and state-specific conditions out of this hub so that a change in one state does not make a 50-state overview misleading.

A 50-state starting point should tell you what to verify, not pretend every state fits a permanent list

State rules change too often for a durable article to publish one static rate beside every state. A better workflow begins with the beneficiary's residency for the distribution year, then asks whether that state taxes individual income, whether it conforms to the federal taxable amount, and whether it provides a retirement-income or death-benefit subtraction. The answer can differ even when two beneficiaries take identical $50,000 distributions from the same decedent's IRA.

Use state return instructions for the exact tax year. Retirement exclusions can have age requirements, dollar caps, source restrictions, or allocation rules for beneficiaries. New York, for example, has a beneficiary allocation mechanism tied to the decedent's pension-and-annuity exclusion; Pennsylvania separately addresses death payments to designated beneficiaries. Those are not interchangeable “retirement income exemptions.”

Residency changes should be documented rather than assumed. Federal law limits a state's ability to tax qualifying retirement income of an individual who is no longer its resident, but whether you actually ceased residency is a factual state-law question. Keep move dates, leases or closing statements, driver's-license and voter-registration changes, and part-year tax records if a large inherited-IRA distribution occurs near a move.

Finally, check for taxes triggered by the death itself. A state inheritance tax can depend on the decedent's domicile and the beneficiary's relationship even when later IRA distributions receive favorable income-tax treatment. That is why the hub separates inheritance tax from annual income tax instead of giving one “state tax” answer.

Recheck the state every distribution year

The federal 10-year window can span several legislative sessions. A retirement exclusion available in year 2 may be changed by year 8, and a state can repeal an inheritance tax or alter its residency rules. Save the state agency page or return instructions used for each large distribution and rerun the analysis before the next one.

This is general information, not personalized tax or legal advice — a CPA or estate attorney can confirm how this applies to your specific inherited account.