Updated October 30, 2026. Quick answer: No. Tennessee’s Hall income tax applied just to interest and dividends, and it “was repealed for tax periods that begin on January 1, 2021” or later. The Department of Revenue now lists the Hall tax under archived taxes and names no current individual income tax, and a FERS or CSRS annuity was never within the Hall tax. The annuity is still on your federal return.
What Tennessee does with a FERS or CSRS annuity
| Question | What the Tennessee documents say |
|---|---|
| What the source says | The state documents cited here do not mention federal civil service pensions; they show the Hall income tax applied just to interest from bonds and notes and dividends from stock and was repealed for tax periods beginning January 1, 2021, or later, and the Department of Revenue’s list of taxes shows the Hall income tax under Archived Taxes with no current individual income tax. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Tennessee documents’ own words
- “receiving interest from bonds and notes and dividends from stock” (Hall Income Tax)
- “incomes derived from dividends from stocks and interest on bonds” (SB0839, Hall income tax reduction bill with fiscal note (109th General Assembly))
How this differs from other pensions in Tennessee
The sources make no distinction between federal pensions and other pensions; the repealed Hall tax reached only interest and dividends, so a pension annuity was never within it, and the Department of Revenue’s tax list names no current individual income tax. See also Does Tennessee 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 Tennessee tax TSP withdrawals? and the TSP calculator.
Where this rule sits on the Tennessee return
The Department of Revenue’s list of taxes shows the Hall income tax among its archived taxes and no current 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 Tennessee during the year, because your former state may tax part of the year.
- Keep reporting the annuity on your federal return as usual.
- Check Tennessee’s other taxes, such as sales tax, separately, because this page covers income tax only.
What the Tennessee documents leave open
The documents describe the Hall tax and its repeal but never mention pensions, CSRS, FERS or the Thrift Savings Plan, so that an annuity is untaxed is read from the Hall tax covering only interest and dividends and from the Department of Revenue’s tax list naming no current individual income tax. That list is a list of taxes the department administers, not a statement that no other income tax exists. The Tennessee Code sections could not be archived from an open source, so the Tennessee General Assembly bill pages for SB0839 and SB0193 are cited for the base of the Hall tax, which a 2016 fiscal note describes as a tax on incomes derived from dividends from stocks and interest on bonds.
Common mistakes
- Treating the repealed Hall tax as still due. The Department of Revenue says not to file a return for a tax year beginning on or after January 1, 2021.
- Assuming no state tax means no tax at all. A taxable FERS or CSRS annuity is still on the federal return.
Related: Does Tennessee tax pensions?, Tennessee military retirement pay, and FERS, TSP and Social Security sequencing.
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Answer againSources
- Hall Income Tax: https://www.tn.gov/revenue/taxes/hall-income-tax.html
- Hall Income Tax: Exemptions and Deductions: https://www.tn.gov/revenue/taxes/hall-income-tax/exemptions-and-deductions.html
- SB0839, Hall income tax reduction bill with fiscal note (109th General Assembly): https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SB0839&GA=109
- SB0193, Hall income tax exemption bill, Public Chapter 453 (110th General Assembly): https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SB0193&GA=110
- Taxes (Tennessee Department of Revenue list of taxes administered): https://www.tn.gov/revenue/taxes.html
Read from the state documents linked above on October 30, 2026. General information, not tax advice.