Updated October 7, 2026. Quick answer: No, not for qualifying retirement income. The Department of Revenue’s withholding FAQ asks “Is Mississippi Income Tax withholding required on pensions and annuities?” and answers no: “retirement income, pensions, annuities are not subject to Mississippi Income Tax”. That answer is about qualifying retirement income. The Department’s employer booklet says the wages subject to withholding include “early or excess distribution of retirement income”, so an early distribution is not covered by it.
Drawing a pension? Whether the state withholds tax from it, from its own documents: Mississippi tax withholding on pension payments.
Mississippi withholding at a glance
| Item | What the documents say |
|---|---|
| Is it required? | No for qualifying retirement income: the withholding FAQ says retirement income, pensions and annuities are not subject to Mississippi income tax. The employer booklet counts an early or excess distribution of retirement income as wages |
| Rate or amount | None stated |
| How to start or stop it | Not stated in the documents read |
| Direct rollover | Not stated in the documents read |
| Changed for 2026? | No change stated; both FAQs read are undated |
What the Mississippi documents say
The Department of Revenue’s business tax FAQ on withholding asks “Is Mississippi Income Tax withholding required on pensions and annuities?” and answers: no, “retirement income, pensions, annuities are not subject to Mississippi Income Tax”.
The individual income tax FAQ adds a limit. It says retirement income and pensions are not taxed if the recipient has met the retirement plan requirements, and that “Early distributions are not considered retirement income” and may be taxed. The employer booklet, a separate document, defines the wages subject to withholding to include “early or excess distribution of retirement income”; neither FAQ says how that applies to a retirement-plan payer.
A $50,000 withdrawal: cash in hand or a direct rollover
Take a $50,000 401(k) withdrawal paid to you. The IRS says a taxable eligible rollover distribution paid to you from an employer plan is subject to “mandatory income tax withholding (generally at a rate of 20%)”, which on $50,000 is $10,000 (computed as $50,000 times 20%) held back for federal tax. If the withdrawal is a qualifying retirement distribution, the FAQ says withholding is not required on pensions and annuities, so the Mississippi amount withheld is $0. If it is an early distribution, the individual FAQ says it is not retirement income and may be taxed, and the employer booklet defines wages to include “early or excess distribution of retirement income”; it also says “No withholding is required on tax-exempt non-taxable retirement income.” The documents read give no rate for an early distribution, so this page states no Mississippi dollar figure for it.
The other path is a direct rollover to an IRA or another plan. For federal tax the IRS says “The mandatory withholding doesn’t apply in a direct rollover”. The Mississippi documents read do not say how a direct rollover is treated for state withholding, so confirm it with the payer before choosing.
What a mover should know
This page is about Mississippi as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it.
What the documents do not say
- The documents read name no rate or form for a retirement payout and do not address a direct rollover. The employer booklet counts an early or excess distribution as wages but does not say how a retirement-plan payer applies that. Both FAQs are undated.
Common mistakes
- Treating every withdrawal as exempt; the individual FAQ says early distributions are not retirement income and may be taxed.
- Assuming no Mississippi withholding means no Mississippi tax on an early distribution.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: how Mississippi taxes 401(k) and IRA withdrawals, Mississippi retirement taxes, retirement withholding calculator, and retirement taxes by state.
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Answer againSources
- Business Tax Frequently Asked Questions (withholding): https://www.dor.ms.gov/business/withholding-tax-faqs
- Individual Income Tax Frequently Asked Questions: https://www.dor.ms.gov/individual/individual-income-tax-frequently-asked-questions
- Withholding Income Tax Tables and Employer Instructions, Pub 89-700-25-1 (revised January 13, 2026; read October 8, 2026): https://www.dor.ms.gov/sites/default/files/tax-forms/business/89700251revised1.13.2026.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 7, 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.