Updated October 16, 2026. Quick answer: Mississippi exempts retirement income, saying “federal, state, and private retirement systems are exempt in total”, but the instructions do not name 403(b) or 457(b) plans and say deferred compensation distributions taken before retirement age or service requirements are met are taxable.
More state retirement-income schedules, line by line: Mississippi Form 80-105 line 46.
Mississippi at a glance
| Item | What the documents say |
|---|---|
| How the state treats 403(b) and 457(b) withdrawals | Retirement systems are exempt in total; early deferred compensation distributions are taxable |
| Do the state’s documents name these plans? | The documents read name neither 403(b) nor 457(b) plans |
| Retirement exclusion or credit | Exemption of retirement income from federal, state and private retirement systems, with no dollar cap |
| Public-employee pension rule | Not stated in the documents read |
| Rate in the documents read | 0% on the first $10,000 of taxable income, then 4% for tax year 2026 |
| Changed for 2026? | The rate above $10,000 is 4% for tax year 2026 (4.4% for 2025) |
What the Mississippi documents say
The Form 80-100 instructions treat retirement income as exempt but add that “Separation pay is not retirement income and does not qualify for exemption”. Pensions and annuities that are taxable as early or excess distributions under the federal Internal Revenue Code (see federal Form 5329) do not qualify for the exemption and are reported as taxable income. Deferred compensation plan distributions received prior to attainment of retirement age and/or service requirements are also taxable for Mississippi purposes and are reported as taxable income.
The Department’s rates page prints “4.4% on the remaining taxable income in excess of $10,000” for 2025 and “Excess of $10,000 of Taxable Income is taxed @ 4%” for the later year.
Withholding and federal tax
Whether a state withholds is a separate rule: see state withholding on retirement withdrawals. Federal rules: 403(b) withdrawal rules and 457(b) withdrawal rules. The IRS says pension and annuity payments from a qualified employer plan have “all or some portion of the amounts you receive may be taxable”.
What the documents do not say
- The documents read do not name 403(b) or 457(b) plans.
- They give no statute section for the exemption.
Common mistakes
- Assuming Mississippi’s rule for a 401(k) or IRA also covers a 403(b) or 457(b): read whether its documents name the plan.
Related: whether Mississippi taxes 401(k) and IRA withdrawals, Mississippi retirement taxes, whether Mississippi taxes pensions, 403(b) withdrawal rules, 457(b) withdrawal rules, and state withholding on retirement withdrawals.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for retirement income
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans your withdrawals
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 Resident, Non-Resident and Part-Year Resident Income Tax Instructions (Form 80-100-25-1-1-000): https://www.dor.ms.gov/sites/default/files/tax-forms/individual/80100251%202.pdf
- Individual Income Tax: Tax Rates: https://www.dor.ms.gov/individual/tax-rates
- IRS Tax Topic 410, Pensions and annuities: https://www.irs.gov/taxtopics/tc410
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.