Does Hawaii Tax Retirement Income?

No. Hawaii does not tax Social Security benefits.

Social Security benefits are not taxed by Hawaii.

The Hawaii answer is separate from the federal one. Depending on combined income, up to 85% of Social Security benefits can be taxable on the federal return regardless of what Hawaii does, so the state rule changes the state line only. Our guide to states that do not tax Social Security shows where Hawaii sits among the states that still tax benefits.

Usually not. Hawaii exempts most pension income, with conditions.

A pension received for past services is excluded to the extent the employer funded it. State, county, and federal government pensions are excluded. For a contributory plan, the part of each payment that comes from the employee's own contributions is taxable and the employer-funded part is not.

Hawaii has no age-based dollar exclusion. The exclusion is structural: it depends on who funded the plan, not how old you are. The standard deduction is the other lever, and Act 46 raised it to $8,000 for a single filer and $16,000 on a joint return for 2026, up from $4,400 and $8,800 in 2025.

Public and private pensions, annuities, and retirement-plan distributions do not always get the same treatment. The pension comparison lists which states exempt pensions broadly, partly, or only for certain plans.

Yes. Hawaii generally taxes traditional 401(k) and IRA withdrawals.

Distributions attributable to 401(k) elective deferrals and to IRA contributions you made yourself are generally taxable. Employer matching and profit-sharing contributions inside the same 401(k) are excluded. An IRA funded by a rollover from an employer plan is treated as a continuation of that plan, so its employer-funded portion keeps the exclusion.

Two timing points matter in Hawaii. A Roth conversion is taxable in the year it is done, and Hawaii starts from federal adjusted gross income, so a large conversion can land in a year when the state exclusion does not cover it. Qualified Roth withdrawals later are generally not taxable at either level. Required minimum distributions follow the same Hawaii rules as any other traditional-account withdrawal.

Every state page on this site runs the same retiree profile so the states can be compared: $30,000 of Social Security, $40,000 withdrawn from a traditional 401(k), and a $20,000 private pension, $90,000 in total.

A 68-year-old with $30,000 of Social Security, $40,000 from a 401(k), and a $20,000 employer-funded pension excludes the Social Security and the pension. If the 401(k) balance came entirely from the retiree's own deferrals, all $40,000 is taxable, and after the $8,000 standard deduction the Hawaii tax is roughly $1,400 before personal exemptions.

Step one, exclude the $30,000 of Social Security. Step two, exclude the $20,000 pension because the employer funded it. Step three, the $40,000 401(k) distribution is taxable to the extent it came from the retiree's elective deferrals, so assume all $40,000 is taxable; subtract the $8,000 standard deduction for $32,000 of taxable income. Step four, on the single schedule that is $859 plus 6.8% of the amount over $24,000, roughly $1,400 before personal exemptions. Contrast a $150,000 withdrawal from a self-funded IRA in the same year: taxable income climbs to about $182,000, the tax is $12,341 plus 8.25% of the amount over $175,000, roughly $12,900, and the marginal rate on the last dollars is 8.25%. If that same $150,000 had come from a rollover IRA holding only employer-funded pension money, Hawaii would tax none of it.

The same $90,000 profile looks different a state line away. The rows below come from the reviewed 51-state table; each state name links to its own guide.

• California: treats Social Security as exempt, pensions as taxed, and 401(k) and IRA withdrawals as taxed, with a top rate of 13.30% and $20,000 military-pay exclusion with income limits.
• Washington: has no individual income tax at all.
• Nevada: has no individual income tax at all.

Retirees hear that Hawaii does not tax pensions and assume their 401(k) and IRA withdrawals ride along. They do not. Hawaii looks through the account to who funded it, and most 401(k) and IRA balances are largely employee money, which is taxable.

Military retirement: Military retirement pay is treated as a government pension for past services and is excluded from Hawaii income. See the military retirement tax map for every state's treatment.

Estate and inheritance tax: Hawaii has an estate tax with a $5,490,000 exclusion per person and rates from 10% to 20% on the excess. The exclusion is a fixed statutory figure that is not tied to the federal amount, though unused exclusion can pass to a surviving spouse.

Selling a home or investments in Hawaii: retirement-income rules do not cover capital gains. See Hawaii capital gains tax before selling appreciated property or a brokerage position in the year you move or retire.

• Confirm the exclusion you are claiming. Hawaii has no age-based dollar exclusion. The exclusion is structural: it depends on who funded the plan, not how old you are. The standard deduction is the other lever, and Act 46 raised it to $8,000 for a single filer and $16,000 on a joint return for 2026, up from $4,400 and $8,800 in 2025.
• Part-year residents. If you moved into or out of Hawaii during the year, retirement income is generally allocated to the period of residency, and the former state may still tax distributions received before the move. Document the move date, the new domicile, and where each distribution was received.
• Withholding and estimates. Pension and IRA custodians often withhold federal tax but not Hawaii tax. If Hawaii taxes any part of your retirement income, check whether quarterly estimated payments are needed to avoid an underpayment penalty.
• Federal side. The federal return has its own rules: up to 85% of Social Security can be taxable, the temporary $6,000 federal senior deduction is available for 2025 through 2028 subject to income limits, and Roth conversions are taxed in the conversion year. State exemptions do not change any of that.
• Large one-time distributions. Keep rollover IRAs that hold employer-funded pension or profit-sharing money separate from IRAs you funded yourself, and keep the records that show the employer-funded share. Commingling the two can turn an excludable distribution into a taxable one because the exclusion ratio has to be proven.

Comparing states before a move? Use the retirement taxes by state table and the moving states tax guide, and read retirement tax planning for how distributions, conversions, and a move are sequenced together.