Tennessee Retirement Income Tax Guide for Seniors
No. Tennessee has no income tax of any kind since the Hall tax on interest and dividends ended in 2021. Retirees pay one of the highest sales taxes in the country instead, and two state programs can lower the property tax on your home.
No. Tennessee does not tax Social Security, pensions, IRA or 401(k) withdrawals, or investment income. The main tax for retirees is sales tax: 7% state plus local, and 4% state on groceries. Homeowners 65 or older with 2025 income of $38,470 or less can get state Property Tax Relief, and in counties that adopted it, the Property Tax Freeze keeps the tax on your home from rising.
The end of the Hall income tax
Tennessee never taxed wages, but until recently it taxed interest and dividends through the Hall income tax. That tax was phased down and repealed for tax years beginning January 1, 2021. Today no form of retirement or investment income is taxed by the state: Social Security, military and civil service pensions, annuities, IRA and 401(k) withdrawals, interest, dividends and capital gains are all untaxed.
Federal tax still applies to part of your Social Security once combined income passes $25,000 (single) or $32,000 (joint). Check your figures with the Social Security tax calculator.
Sales tax is the big one
Without an income tax, Tennessee leans heavily on sales tax.
| Purchase | State rate | Plus |
|---|---|---|
| Most goods | 7% | Local option rate set by the county or city |
| Food and food ingredients (groceries) | 4% | Local option rate |
| Prescription drugs | Exempt |
For a retiree on a fixed income, the 4% grocery rate matters: unlike many states, Tennessee taxes food at home. Budget for it when comparing living costs.
Tennessee has no estate tax and no inheritance tax.
Two programs that cut property tax at 65
Property tax rates in Tennessee are set by counties and cities and are moderate by national standards. Two separate programs help older homeowners, and you can use both.
State Property Tax Relief
This is a state reimbursement program run by the Comptroller of the Treasury and paid for by the General Assembly. For 2026:
- You must be 65 by December 31, 2026, and own and live in the home as your primary residence.
- Total 2025 income from all sources for you, your spouse, any co-owner and any resident remainder holder must be $38,470 or less.
- The relief is figured on up to $33,600 of the home's market value, so it covers part of the bill rather than all of it.
- You apply through your county trustee (or city collecting official) when you get your 2026 tax bill. The deadline is 35 days after the delinquency date, and your taxes must be paid by then.
Disabled homeowners and disabled veterans or their surviving spouses have their own versions with different rules. Disabled veterans can get relief figured on up to $175,000 of market value.
Property Tax Freeze (local option)
Counties and cities can choose to adopt the freeze. Where it applies, the tax on your home is frozen at the amount in the year you qualify, even if the local rate or your home's value rises. You must be 65 by the end of the year you apply, own and live in the home, and have income at or below the limit your county uses for that year. Each jurisdiction picks a limit. For 2026, many use $38,470, while others, including Davidson (Nashville), Knox, Shelby, Rutherford and Montgomery counties, use a higher limit of $63,470. If you add to the home, the frozen amount can be adjusted.
An approval for state Property Tax Relief counts as proof of age and income for the freeze, but you still file a separate freeze application with the trustee. Both programs require you to reapply or update your income each year.
Example of how the two fit together
Suppose a 70-year-old widow in Knox County has 2025 income of $34,000 from Social Security and a small pension. She is under both income limits, so she can apply for state relief to get a credit on part of her bill and for the freeze to stop the bill from growing. A neighbor with $50,000 of income would not qualify for state relief but could still qualify for the Knox County freeze. These figures are illustrations; your trustee confirms the actual amounts.
Tips before you apply
- Gather income records for everyone on the deed who lives in the home: your tax return, SSA-1099, pension 1099-R and bank interest statements. If your income is within $100 of the limit (or $200 with a co-owner), documentation is required.
- Check your application status online at the Comptroller's tax relief site.
- Ask your trustee whether your county and your city have each adopted the freeze. They decide separately.
See how Tennessee compares in our state retirement income tax finder, or read about senior property tax exemptions by state.
Frequently Asked Questions
Does Tennessee tax retirement income?
No. Since the Hall income tax was repealed for 2021 and later, Tennessee taxes no wages, Social Security, pensions, retirement account withdrawals, interest or dividends.
What is the income limit for Tennessee property tax relief for 2026?
$38,470 in total 2025 income for the applicant, spouse, co-owners and resident remainder holders, according to the Tennessee Comptroller. Relief is calculated on up to $33,600 of market value.
Does every Tennessee county have the property tax freeze?
No. It is a local option, and counties and cities adopt it separately. Each sets an income limit, which for 2026 ranges from $38,470 to $63,470 in the jurisdictions listed by the Comptroller.
Does Tennessee tax groceries?
Yes, at a reduced state rate of 4% plus the local rate. Most other goods are taxed at 7% state plus local. Prescription drugs are exempt.
Where do I apply for Tennessee tax relief or the freeze?
At your county trustee's office, or your city collecting official if you live inside city limits. Apply after you receive your tax bill.
Sources: Tennessee Comptroller of the Treasury, 2026 Property Tax Relief brochure and 2026 Property Tax Freeze jurisdictions and income limits; Tennessee Department of Revenue sales and use tax rates. Read October 2026. This page is general information, not tax advice, and is not affiliated with the State of Tennessee or the IRS. Confirm eligibility with your county trustee. See our Data Sources page for how we source figures.