Wyoming Retirement Tax Friendliness

Wyoming Retirement Taxes

For retirees, Wyoming has it all. It is filled with beautiful scenery, including the world’s oldest national park, Yellowstone. And on top of that, Wyoming has some of the lowest retirement taxes in the country.

Why are Wyoming’s retirement taxes so low? For starters, there’s no state income tax in Wyoming. That means no tax on retirement income like Social Security benefits or 401(k) withdrawals.

Additionally, Wyoming’s other taxes are quite low. The state’s median property tax bill is well below the national median. The statewide sales tax is also low, although you may be subject to local sales tax rates, as well. In short, if you’re retiring in Wyoming, you can expect your overall state and local tax burden to be low in comparison to other states.

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Is Wyoming tax-friendly for retirees?

Wyoming may be the most tax-friendly state south of Alaska. It does not have its own income tax, which means all forms of retirement income will not be taxed at the state level. The effective property tax rate in Wyoming is just 0.57%, meaning the median annual property tax bill is equal to 0.57% of the median home value. The average combined state and local sales tax rate is 5.50%. Wyoming also has no estate or inheritance tax.

Is Social Security taxable in Wyoming?

Wyoming does not tax Social Security retirement benefits, even those taxed federally. Wyoming’s cost of living is slightly lower than the national average, so it may be possible for some retirees to live off Social Security alone, especially in the less expensive parts of the state.

Are other forms of retirement income taxable in Wyoming?

Wyoming does not tax any income. That means withdrawals from a 401(k), IRA, 403(b) or any other type of retirement account will not be taxed at the state level in Wyoming. Likewise, pension income is tax-free in Wyoming. Remember that federal taxes will still be owed on these other types of retirement income, though.

How high are property taxes in Wyoming?

Wyoming’s effective property tax rate is 0.57%, which is the 14th-lowest rate in the U.S. That means homeowners pay about $570 in property taxes annually for every $100,000 in home value.

Budget-conscious retirees will likely be able to find an affordable place to live in Wyoming, where housing costs are generally very low. One exception is Teton County, which contains all of Grand Teton National Park and 40% of Yellowstone National Park, where median home values are quite high.

How high are sales taxes in Wyoming?

Wyoming’s statewide sales tax is very low, at 4%. However, local sales tax rates can reach up to 5%.

Groceries are exempt from sales taxes, though food costs in Wyoming are higher than the national average. Prescription drugs and medical equipment are also exempt from sales tax.

What other Wyoming taxes should I be concerned about?

Wyoming has no other major taxes that will significantly affect seniors and retirees. It does not have an estate or inheritance tax. Like all other states, it does have excise taxes on alcohol, cigarettes and gasoline, but those are all fairly low.