Updated October 7, 2026. Quick answer: No. The South Dakota Department of Revenue states that it is “one of seven states that does not impose a state income tax”. A pension from another state is therefore not taxed by South Dakota, and a pension earned in South Dakota is not taxed by South Dakota after a move.
Federal civil service pensions in South Dakota: does South Dakota tax federal pensions.
How South Dakota treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | South Dakota’s own documents describe no state income tax, so there is no state income tax on a nonresident’s pension. The Department of Revenue says the state does not impose a state income tax. The federal rule in 4 U.S.C. 114 separately bars states from taxing a nonresident’s retirement income. |
| Residents with a pension earned elsewhere | The Department of Revenue states that South Dakota does not impose a state income tax. The source reviewed contains no pension-specific exclusion because there is no tax to exclude it from. The same page directs federal return questions to the Internal Revenue Service. |
| Part-year residents (year of a move) | No South Dakota income tax applies in the year of a move, because the Department of Revenue says the state does not impose a state income tax. The source reviewed describes no part-year income tax return. Income received in the year of a move is not apportioned or taxed by South Dakota. |
| Rate | South Dakota prints no personal income tax rate or schedule for 2025. The Department of Revenue states that the state does not impose a state income tax. |
| Return to file | No South Dakota personal income tax return is described in the source reviewed. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a South Dakota resident, and $20,000 after leaving.
South Dakota levies no personal income tax, so the $40,000 is not taxed by South Dakota whether it was paid before or after the move: $0 on $40,000. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means any income from a qualified retirement plan, a simplified employee pension, a 403(a) or 403(b) plan, an individual retirement plan, an eligible 457 plan or a governmental plan. Income from a nonqualified deferred compensation plan counts only if it is part of a “series of substantially equal periodic payments” made for life or for a period of at least 10 years, or is a payment after termination of employment from a plan that exists only to provide benefits above the Internal Revenue Code limits, so not every payment is covered. Retired pay of a member of a uniform service is also covered.
Related: how South Dakota taxes retirement income, whether South Dakota taxes pensions, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- Taxes (South Dakota Department of Revenue): https://dor.sd.gov/individuals/taxes/
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.