Updated October 16, 2026. Quick answer: Mississippi’s return instructions exempt retirement income with no dollar cap, since “private retirement systems are exempt in total”, but pensions and annuities taxable as early or excess distributions do not qualify, and the documents read do not say whether an inherited IRA counts as retirement income.
Mississippi at a glance
| Item | What the documents say |
|---|---|
| How the state taxes retirement-account income | Retirement income from private retirement systems is exempt in total, with carve-outs for early and excess distributions |
| Do the state’s documents address beneficiaries? | Not addressed: the documents read do not mention inherited accounts |
| Retirement exclusion or credit | Retirement income exempt in total, no dollar cap printed; early or excess distributions and deferred compensation taken before retirement age are taxable |
| Rate in the documents read | 0% on the first $10,000; 4.4% above that for 2025 and 4% for 2026 |
| State inheritance or estate tax | Not mentioned in the documents read |
| Changed for 2026? | The rates page prints 4% on income above $10,000 for tax year 2026 (4.4% for 2025) |
What the Mississippi documents say
The Form 80-105 instructions list Social Security, Railroad Retirement and retirement income from federal, state and private retirement systems as exempt in total. That covers the line for retirement income with no dollar cap printed.
There are carve-outs. Pensions and annuities taxable as early or excess distributions under the federal code (Form 5329) “do not qualify for exemption from Mississippi income tax”. Deferred compensation distributions received before retirement age or service requirements are taxable.
The rates page prints the rate for tax year 2026: “Excess of $10,000 of Taxable Income is taxed @ 4%”. For 2025 it prints 4.4%.
The federal 10-year rule and your Mississippi tax year
IRS Publication 590-B says a beneficiary may be required to take the entire account balance by the “end of the 10th year following the year of the owner’s death”, with exceptions for certain beneficiaries. Because the balance generally has to come out within that window, the timing of each withdrawal decides which tax year it lands in. See the 10-year rule and annual RMDs, lump sum versus spreading withdrawals and inherited IRA rules.
Withholding and other state taxes
Whether a state withholds from a withdrawal is a separate rule: see state withholding on retirement withdrawals. For Mississippi’s own death taxes, see Mississippi inheritance tax.
What the documents do not say
- The documents read do not mention inherited accounts or beneficiaries of retirement accounts.
- The exemption is described by retirement age and service requirements; the documents do not say how an heir’s receipts are treated.
- They say nothing about a deduction or credit for estate tax or income in respect of a decedent.
Common mistakes
- Assuming Mississippi’s rule for your own retirement income also covers an account you inherited: read whether its documents address beneficiaries, and confirm the point with a Mississippi preparer.
Related: state tax on inherited IRA withdrawals, state by state, whether Mississippi taxes 401(k) and IRA withdrawals, Mississippi retirement taxes, Mississippi inheritance tax, inherited IRA rules, spouse versus non-spouse beneficiary rules, and state withholding on retirement withdrawals.
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Answer againSources
- 2025 Mississippi Resident Individual Income Tax Instructions (Form 80-105): https://www.dor.ms.gov/sites/default/files/tax-forms/individual/80100251%202.pdf
- Individual Income Tax Rates: https://www.dor.ms.gov/individual/tax-rates
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/pub/irs-pdf/p590b.pdf
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.