South Dakota

Retirement income taxes in South Dakota

Tax year 2026. Verified 2026-10-07.

Retirement income

Social Security

Not taxed: the state has no income tax.

Sources (6)

• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Governor's Budget, Fiscal Year 2027 (Bureau of Finance and Management), Governor's letter of transmittal
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Bank Franchise Tax, first sentence
• S.D. Const. art. XI, § 2 (Classification of property for taxation--Income)

Government pensions and plans, in-state and federal

Not taxed: the state has no income tax.

Sources: same as above

Government pensions and plans from other states

Not taxed: the state has no income tax.

Sources: same as above

Military retirement pay

Not taxed: the state has no income tax.

Sources: same as above

Private pensions

Not taxed: the state has no income tax.

Sources (7)

• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Governor's Budget, Fiscal Year 2027 (Bureau of Finance and Management), Governor's letter of transmittal
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43
• SDCL § 10-44-2 (Tax levied on premiums and consideration for annuities), opening sentences
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Insurance Company Tax, annuity sentence
• S.D. Const. art. XI, § 2 (Classification of property for taxation--Income)

Private employer plan withdrawals (401(k) and similar)

Not taxed: the state has no income tax.

Sources (6)

• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Governor's Budget, Fiscal Year 2027 (Bureau of Finance and Management), Governor's letter of transmittal
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Bank Franchise Tax, first sentence
• S.D. Const. art. XI, § 2 (Classification of property for taxation--Income)

IRA withdrawals

Not taxed: the state has no income tax.

Sources: same as above

Dividends and interest

Not taxed: the state has no income tax.

Sources (7)

• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Governor's Budget, Fiscal Year 2027 (Bureau of Finance and Management), Governor's letter of transmittal
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Bank Franchise Tax, first sentence
• SDCL ch. 10-16 (Taxation of Moneys and Credits [Repealed]), chapter note
• S.D. Const. art. XI, § 2 (Classification of property for taxation--Income)

Capital gains

Not taxed: the state has no income tax.

Sources (6)

• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Governor's Budget, Fiscal Year 2027 (Bureau of Finance and Management), Governor's letter of transmittal
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Bank Franchise Tax, first sentence
• S.D. Const. art. XI, § 2 (Classification of property for taxation--Income)

A deduction for all income, by age or low income

Does not apply: the state has no income tax.

Sources (4)

• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Governor's Budget, Fiscal Year 2027 (Bureau of Finance and Management), Governor's letter of transmittal
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43

Other state taxes on this income

None.

Sources (11)

• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, all chapter entries 01 through 65 read; the only chapter named for an income tax is ch. 10-43
• SDCL Title 10 (Taxation), the legislature's chapter list, entries 40, 40A, 41
• SDCL Title 61 (Reemployment Assistance), the legislature's chapter list, entry 05: the unemployment insurance contribution, on employers
• SDCL Title 35 (Alcoholic Beverages), the legislature's chapter list, entry 05: a tax outside Title 10
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Bank Franchise Tax, first sentence
• SDCL § 10-44-2 (Tax levied on premiums and consideration for annuities), opening sentences
• Budget in Brief FY2027, Explanation of Ongoing General Fund Receipts, Insurance Company Tax, annuity sentence
• SDCL ch. 10-16 (Taxation of Moneys and Credits [Repealed]), chapter note
• Budget in Brief FY2027 (Bureau of Finance and Management), Chief Financial Officer's letter: what the receipts listing covers (the general fund only; cited beside the code index, never as the whole list)
• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)

Local income taxes

None.

This rests on a search, not on a ban. We found no local government in South Dakota levying an income, wage or payroll tax for tax year 2026. State law lets any incorporated municipality impose any non-ad valorem tax, defined as any tax other than an ad valorem real property tax, in accordance with the provisions of its chapter, except upon fuel used for motor vehicles, by ordinance enacted by its local governing board (with one condition: a tax on the sale, use, storage and consumption of items taxed under the state's sales and use tax chapters must conform in all respects to the state tax on those items, with the exception of the rate, and that rate may not exceed two percent); such a tax may be referred to a vote of the people, and a separate statute bars any county, city or other governmental unit, unless a statute specifically provides otherwise, from enacting a tax similar to a tax which provides revenues to the state (taxes enacted and imposed on or before March 1, 1996 excepted).

Sources (15)

• SDCL § 10-52-2
• SDCL § 10-52-1
• SDCL § 10-52-3
• SDCL § 10-52-4
• SDCL § 6-12-14
• SDCL § 6-12-14, last sentence
• S.D. Const. art. XI, § 10
• S.D. Const. art. IX, § 2
• S.D. Const. art. XI, § 2 (Classification of property for taxation--Income)
• SDCL § 9-12-2(2)
• SDCL § 9-55-7
• SDCL § 9-34-10
• SD Department of Revenue, Individuals > Taxes, heading 'Income Tax' (page copyright 2026)
• Municipal Tax page, introduction
• SDCL § 10-52B-1

Estate and inheritance taxes

Estate tax

No.

Sources (6)

• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters
• SDCL Title 10 (Taxation), the legislature's chapter list, entries 40, 40A, 41
• SDCL ch. 10-40A (Estate Tax [Repealed]), §§ 10-40A-1 to 10-40A-3
• SDCL ch. 10-40A (Estate Tax [Repealed]), §§ 10-40A-5 to 10-40A-13
• SD Department of Revenue, Individuals > Taxes, heading 'Inheritance and Estate Taxes', last sentence
• S.D. Const. art. XI, § 15 (Inheritance tax prohibited), whole section text

Inheritance tax

No.

Sources (5)

• S.D. Const. art. XI, § 15 (Inheritance tax prohibited), whole section text
• SD Department of Revenue, Individuals > Taxes, heading 'Inheritance and Estate Taxes'
• SDCL ch. 10-40 (Imposition and Amount of Inheritance Tax [Repealed]), §§ 10-40-1 to 10-40-23.5
• SDCL Title 10 (Taxation), the legislature's chapter list, entries 40, 40A, 41
• South Dakota Codified Laws, the legislature's chapter list for every title (71 titles, 2,192 chapters, read whole by the main thread on 2026-10-07; the record's sources/code_index/ holds every page and the lists of chapters with a tax or income word); this page is Title 10, Taxation, 65 chapters

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