How Oklahoma taxes retirement income

Some 2026 figures pending confirmation Tax year 2026 · research last updated October 2, 2026

Oklahoma doesn't tax Social Security benefits.
Exclusions and subtractions for retirement income (details below):
- Oklahoma government / federal civil service retirement exclusion: at most $10,000 per person.
- Other retirement income exclusion: at most $10,000 per person.
Rates for 2026: 0% to 4.5%, graduated.

At a glance

Income tax	Yes
Rates (2026)	0% to 4.5%, graduated
Starts from	Federal adjusted gross income (AGI)
Standard deduction	$6,350 single, $12,700 married filing jointly
Personal exemption	$1,000 per person
Age 65 and older	$1,000 extra exemption per person
Social Security	Not taxed
Retirement income exclusions	2 (see below)
Roth conversions	Taxable
Capital gains	Taxed like other income
Local income tax	None

Tax rates

Brackets apply to Oklahoma taxable income. Other filing statuses are in the rules reference.

Rate	Single: taxable income	Married filing jointly: taxable income
0%	$0 to $3,750	$0 to $7,500
2.5%	$3,750 to $4,900	$7,500 to $9,800
3.5%	$4,900 to $7,200	$9,800 to $14,400
4.5%	$7,200 and up	$14,400 and up

Oklahoma doesn't tax Social Security benefits.

Schedule 511-A line 1: all Social Security benefits included in federal AGI are subtracted. Railroad Retirement Board benefits included in AGI are also subtracted (line 7).

Pensions, IRAs and 401(k)s

Oklahoma government / federal civil service retirement exclusion (Schedule 511-A line 5)

Limit: $10,000 per person · Applies to: pensions

Up to $10,000 per individual (income must be in that person's name), not exceeding the amount in federal AGI, of benefits from Oklahoma public retirement systems (OPERS, TRS, law enforcement, firefighters, police, county/municipal systems, judges, etc.) or federal civil service. Early distributions on termination before retirement/disability (1099-R code 1) don't qualify here. Shares the same $10,000 per-person cap with line 6. CSRS benefits paid in lieu of Social Security are 100% excluded on a separate line (A3); military retirement 100% excluded (A4).

Other retirement income exclusion (Schedule 511-A line 6)

Limit: $10,000 per person · Applies to: pensions, IRA distributions, annuities

Up to $10,000 per individual, not exceeding the amount in federal AGI, of retirement benefits from IRC §401 plans, §457 plans, §408 IRAs/SEPs, §403(a)/(b) annuities, U.S. Retirement Bonds, and §402(e) lump sums. Reduced dollar-for-dollar by any amount claimed on line 5 (combined cap $10,000 per person). No age requirement stated in the instructions or OAC 710:50-15-49. Social Security does not count toward the cap. Commercial (non-qualified) annuities are not listed and don't qualify.

Roth conversions

A Roth conversion counts as taxable income for Oklahoma. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

Taxed like other income, at the rates above. Except the Oklahoma capital gain deduction (Schedule 511-A line 12, Form 561): 100% of qualifying net capital gains from (1) Oklahoma real or tangible personal property owned >= 5 uninterrupted years, (2) stock/ownership interests in an Oklahoma-headquartered company owned >= 2 years, or (3) sale of substantially all assets of an Oklahoma-headquartered business held >= 2 years. Ordinary brokerage gains on publicly traded non-OK stock don't qualify.

Credits and relief for older residents

Sales tax relief credit (Form 538-S, line 25). Refundable $40 per exemption-type person (2025 Form 538-S line 15: exemptions x $40) for full-year residents with total gross household income <= $20,000, raised to $50,000 if age 65+ by Dec 31, disabled, or claiming a dependent. Gross household income includes nontaxable income such as Social Security. Income limit: Gross household income <= $50,000 if 65+

More detail from our research notes

Rates restructured by HB 2764 (signed May 2025) effective tax year 2026: top rate 4.75% -> 4.5%, six brackets -> three plus a 0% band. Standard deduction amounts and the $1,000 exemption are set in statute and not indexed. Roth conversions are taxable income (the Form 511 instructions explicitly exclude conversion income only from the 65+ special-exemption AGI test, implying it is otherwise taxable). Because conversions come from §408 IRAs, they appear to fall within the 'Other Retirement Income' $10,000 exclusion, but no OTC guidance confirming or denying this was found.

Pending confirmation

These points were still being confirmed against Oklahoma's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

4 items

2026 Form 511 packet/tax table not yet published (expected December 2026 at https://oklahoma.gov/tax/individuals/income-tax/forms.html). Standard deduction single/MFS $6,350 and joint $12,700 and the $1,000 exemption are CONFIRMED for 2026 by the 2026 withholding tables (annual 0% band ends at $10,100 single = $6,350 + $3,750, $20,200 married = $12,700 + $7,500; allowance = $1,000 personal exemption). Still assumed from the 2025 packet (statutory, not indexed): HOH $9,350, $17,000 itemized cap, 65+ special exemption AGI limits.
Whether a traditional-to-Roth conversion qualifies for the $10,000 'Other Retirement Income' exclusion (no OTC ruling found).
Whether the $10,000 'Other Retirement Income' exclusion has any age/'on account of retirement' requirement for IRA withdrawals (2025 instructions list none; statute 68 O.S. §2358 not read directly: oscn/justia blocked automated fetches on 2026-10-02).
2027: same rates as 2026 unless the State Board of Equalization certifies a 0.25-pt cut (preliminary December 2026, final February 2027, effective TY2028 at the earliest per HB 2764), so no 2027 change is modeled.

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

2025 Form 538-S line 15 (in the 2025 Form 511 packet): qualified exemptions x $40 sales tax relief credit; household income limit $20,000, $50,000 if 65+ (packet line 25 instructions). Local copy; 2025 Form 511 packet line 10 and Schedule 511-D (federal itemizers must itemize; income/sales tax in line 5e removed; $17,000 cap excl. medical and charity); 68 O.S. 2358(E)(3)(b),(E)(24); proration of line 5e pending confirmation:…; 2025 Form 511 packet: standard deduction, $1,000 exemption, 65+ special exemption AGI limits and Roth-conversion note, itemized $17,000 cap, Social Security subtraction, $10,000 retirement exclusions (lines 5-6), OK capital gain deduction, sales tax relief…https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/individuals/current/511-Pkt.pdf
2026 withholding tables, annual percentage method: 0% to $10,100 single / $20,200 married, $1,000 allowance (confirms 2026 standard deduction and exemption). Local copy; 2026 withholding tables (confirm 2026 2.5/3.5/4.5% structure; single thresholds 3,750/4,900/7,200 after $6,350 deduction)https://www.oklahoma.gov/content/dam/ok/en/tax/documents/resources/publications/businesses/withholding-tables/WHTables-2026.pdf
HB 2968 (2026, $20,000 retirement exclusion from TY2027): last action 2/19/2026 subcommittee do-pass, never reached the floor (not enacted). Local copyhttp://www.oklegislature.gov/BillInfo.aspx?Bill=HB2968&Session=2600
2026 rate schedule (HB 2764 enrolled, amending 68 O.S. §2355(D))https://www.oklegislature.gov/cf_pdf/2025-26%20ENR/hB/HB2764%20ENR.PDF
OAC 710:50-15-49 retirement income deduction rule (no age requirement)https://law.cornell.edu/regulations/oklahoma/OAC-710-50-15-49

Taxtirement's Oklahoma calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

See your own years. Taxtirement applies these Oklahoma rules, and the federal and Medicare rules, to your household for every year of retirement, and shows the calculation behind each number. Coming November 2026 for iPhone, iPad and Mac.

This page summarizes Oklahoma's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.