Updated October 16, 2026. Quick answer: No. Mississippi’s Department of Revenue says “retirement income, pensions, annuities are not subject to Mississippi Income Tax”, and its withholding publication says “No withholding is required on tax-exempt non-taxable retirement income”.
More on public pension systems, topic by topic: Mississippi PERS COLA.
Mississippi pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | No withholding is required on tax-exempt retirement income. Retirement income is generally not taxed in Mississippi if the recipient has met the retirement plan requirements, and early distributions may be taxed |
| Default rate if you give the payer no form | None stated; there is no tax to withhold on exempt retirement income |
| Lump sum or one-time payment | Early or excess distributions of retirement income are treated as wages, so the publication’s wage withholding tables apply; it prints no separate flat rate for them |
| Form to start, change or stop it | No pension withholding form named in the documents read |
| Changed for 2026? | No change to the retirement-income rule; the wage tables are effective January 1, 2026 |
What the Mississippi documents say
Mississippi generally does not tax retirement income if the recipient has met the retirement plan requirements, and the Department of Revenue’s business FAQ says retirement income, pensions and annuities are not subject to the state income tax. Its employer publication adds that no withholding is required on tax-exempt retirement income.
The exception is an early or excess distribution. The publication’s definition of wages “includes early or excess distribution of retirement income”, and the individual FAQ says “Early distributions are not considered retirement income”. Those payments count as wages for withholding purposes.
The wage withholding tables in the publication are labelled “Effective January 1, 2026”.
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, state tax withholding on IRA and 401(k) withdrawals in Mississippi covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The documents read print no separate flat rate for early or excess distributions. Because the publication counts them as wages, its wage withholding tables and the Form 89-350 exemption certificate apply to them, and if no certificate is filed the withholding is based on zero exemption.
Common mistakes
- Reading a state with no withholding as a state with no tax; the tax can still be due when you file.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in Mississippi, Mississippi retirement taxes, whether Mississippi taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Business Tax Frequently Asked Questions (withholding): https://www.dor.ms.gov/business/withholding-tax-faqs
- Pub 89-700-25-1 Withholding Income Tax Tables and Employer Instructions: https://www.dor.ms.gov/sites/default/files/tax-forms/business/89700251revised1.13.2026.pdf
- Individual Income Tax Frequently Asked Questions: https://www.dor.ms.gov/individual/individual-income-tax-frequently-asked-questions
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
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.