Updated October 5, 2026. Quick answer: Yes, with a $10,000 exclusion. The 2025 packet says “Each individual may exclude their retirement benefits up to $10,000”, including IRC 408 annuities and 403(a) or (b) employee annuities.
State retirement-income forms, line by line: Oklahoma Schedule 511-A.
How Oklahoma treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Taxed; up to $10,000 of retirement benefits excluded per individual |
| What counts | “individual retirement account, annuity or trust or simplified employee pension”; “An employee annuity under IRC Sec. 403 (a) or (b)” |
| Shared cap | The same $10,000 cap is shared with the government and federal civil service retirement exclusion |
| Military | “Each individual may exclude 100% of retirement benefits from any component” |
| Rate | The packet’s worksheet prints “$4,562 plus 0.0475 over $100,000”, as a decimal |
| Purchased annuities | The packet does not mention commercial annuity contracts |
A $24,000 example
A retiree with $24,000 a year from a 403(b) annuity or an IRA annuity excludes $10,000, leaving $14,000, computed as $24,000 minus $10,000, to be taxed on Oklahoma’s graduated schedule.
What changes in 2026
The latest documents read print no 2026 change to the way annuity income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether Oklahoma taxes pensions, how Oklahoma taxes retirement income, state tax on 401(k) and IRA withdrawals, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- 2025 Oklahoma Resident Individual Income Tax Forms and Instructions, Form 511 packet (Oklahoma Tax Commission): https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/individuals/current/511-Pkt.pdf
Sources: the primary documents linked above, read on October 5, 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.