Tennessee is one of a handful of states with no personal income tax. Retirement savings and Social Security are also not taxed at the state level. However, you can expect to pay more when shopping here. Tennessee’s sales tax is the second highest in the country. Tennessee also ranks near the top nationally when the state tax is combined with the average local sales tax, according to the Tax Foundation.
Tennessee does not have a personal income tax.
Watch the video below to learn how to identify your 2023 federal income tax brackets.
No. Because Tennessee does not have a personal income tax, distributions from pensions, 401(k)s, 403(b)s and IRAs are not taxed at the state or local level. Tennessee also does not collect income taxes on military retirement pay.
AARP's Retirement Calculator can help you determine if you are saving enough to retire when — and how — you want.
Tennessee has no tax on investment income, as it repealed all taxes on income earned from interest and dividends starting with the 2021 tax year.
No, but you may pay federal taxes on a portion of your Social Security benefits , depending on your income. Up to 50 percent of your benefits will be taxed if you file an individual tax return and make $25,000 to $34,000 in total income — or if you file jointly and as a couple make $32,000 to $44,000 in total income. Up to 85 percent of your benefits will be taxed by the federal government if your total income is more than $34,000 individually or $44,000 as a couple.
AARP's Social Security Calculator can assist you in determining when to claim and how to maximize your Social Security benefits.
Property tax is a local tax based on the value of your house and land, which is determined by county assessors . The average tax rate was 0.67 percent of a property’s assessed value in 2021, according to the Tax Foundation. Rates vary by county and municipality.
The state’s median property tax bill in 2021 ranged from $463 in Fentress County to $2,588 in Williamson County.
Tennessee does not tax personal property such as cars and boats.
The Tennessee Comptroller of the Treasury has more information about how your property is assessed, how to calculate your tax bill and how to file an appeal. The Comptroller’s office also has online information to help you find more information about property taxes in your county.
No. Tennessee does not have an estate or inheritance tax . On the federal level, estate tax can kick in for high net worth estates .
Yes. Low-income homeowners who are 65 and older or disabled, as well as disabled veteran homeowners or their surviving spouses, may be eligible for reimbursement of some or all of their property taxes through the Tennessee Property Tax Relief program . Contact your county trustee or your city tax collector to apply. The Tennessee Comptroller of the Treasury has more information, including detailed eligibility requirements .
Homeowners who are 65 and older and meet income requirements may also qualify for Tennessee’s Property Tax Freeze program if they live in a participating county or municipality . Find more information on the Tennessee Comptroller of the Treasury website .
Tennessee doesn’t have a personal income tax, therefore the state does not tax military pensions and active-duty pay. See this guide from the Tennessee Department of Revenue for more information.
Tennessee residents do not need to file a state income tax return because there is no personal income tax. The deadline for filing federal income tax returns is April 15, 2024.
For help estimating your annual income taxes, use AARP's Tax Calculator.
This guide was first published on Nov. 27, 2023.
Michelle Tuccitto Sullo is a states writer and editor for AARP. She previously served as managing editor of the Hartford Business Journal in Connecticut and has also worked for the New Haven Register, the Connecticut Law Tribune and New Haven Biz.
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