Updated October 30, 2026. Quick answer: No. The state Department of Revenue says South Dakota “does not impose a state income tax”. That leaves a FERS or CSRS annuity untaxed by the state, though it is still on the federal return.
What South Dakota does with a FERS or CSRS annuity
| Question | What the South Dakota documents say |
|---|---|
| What the source says | The state documents cited here say South Dakota imposes no individual income tax, so a federal civil service pension such as a CSRS or FERS annuity is not taxed by the state; none of them mention federal pensions by name. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the South Dakota documents’ own words
- “South Dakota does not impose a personal or corporate income tax” (Taxes on the Campaign Trail)
- “South Dakota and Wyoming do not impose an individual income tax” (Comparison of Neighboring State Tax Systems)
How this differs from other pensions in South Dakota
The sources describe no separate federal pension rule; the absence of an individual income tax applies equally to federal, private, and other pension income. See also Does South Dakota tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals. For the Thrift Savings Plan itself, see Does South Dakota tax TSP withdrawals? and the TSP calculator.
Where this rule sits on the South Dakota return
South Dakota collects no individual income tax, so there is no state return to report an annuity on and no line to claim.
Checks before you rely on this answer
- Confirm your move date if you moved to South Dakota during the year, because the other state may tax part of the year.
- Keep reporting the annuity on your federal return as usual.
- Check South Dakota’s other taxes, such as property tax, separately, because this page covers income tax only.
What the South Dakota documents leave open
No document names pensions, CSRS, FERS or the TSP, so the answer rests on the statement that no individual income tax exists. There are no return instructions because South Dakota has no individual income return, and the statute pages could not be archived as text.
Common mistakes
- Assuming no state tax means no tax at all. A taxable FERS or CSRS annuity is still on the federal return.
- Keeping a former state’s rule in mind after a move. The state you live in decides which rule applies.
Related: Does South Dakota tax pensions?, South Dakota military retirement pay, and FERS, TSP and Social Security sequencing.
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Answer againSources
- Taxes (Individuals): https://dor.sd.gov/individuals/taxes/
- Taxes on the Campaign Trail: https://dor.sd.gov/media/alkhwrgn/campaign.pdf
- Comparison of Neighboring State Tax Systems: https://mylrc.sdlegislature.gov/api/Documents/IssueMemo/252628.pdf?Year=2023
Read from the state documents linked above on October 30, 2026. General information, not tax advice.