Nevada PERS taxes: no Nevada tax, but federal tax applies

Is a Nevada PERS pension taxable?

Not by Nevada. The state constitution forbids a personal income tax, and NRS 286.670 exempts Nevada PERS benefits from state, county and city taxes. The IRS taxes it from your first check; only a small share tied to your after-tax contributions is tax-free, and post-retirement increases are fully taxable. NRS 286.670(1)(a)

• Nevada has no personal income tax: the state constitution forbids one. State law also exempts Nevada PERS benefits from all state, county and municipal taxes.Nevada Constitution, Art. 10, Sec. 1(9); NRS 286.670(1)(a)
• Your benefit is subject to federal income tax. A small part tied to your after-tax contributions is tax-free each year, but post-retirement increases are fully taxable. Nevada PERS withholds federal tax unless you tell it in writing not to, and sends a 1099-R by January 31.Pre-Retirement Guide (REV 1/25), p. 9, Deductions; p. 13

Nevada

• Nevada's Constitution forbids an income tax on the wages or personal income of natural persons. Nevada Constitution, Art. 10, Sec. 1(9)
• Nevada PERS allowances, refunds and other rights under NRS chapter 286 are exempt from all state, county and municipal taxes. NRS 286.670(1)(a)

Federal

• Benefits are federally taxable from the first payment. A portion tied to your after-tax personal contributions is excludable each year until you outlive your IRS actuarial life expectancy. Post-retirement increases are 100% taxable. Nevada PERS mails Form 1099-R by January 31. Pre-Retirement Guide (REV 1/25), p. 13, Important Information
• Nevada PERS is required to withhold federal income tax unless you tell it in writing not to. Pre-Retirement Guide (REV 1/25), p. 9, Deductions

How the tax-free part works

If you paid in under the Employee/Employer plan, part of each check is a return of money already taxed. Which plan you were in is explained on your enrollment group page; the refund side is on leaving: refund or wait?

• Your allowance is paid first from the contributions you personally made; once those are used up, it is paid from Nevada PERS funds (employer contributions and investment earnings).Pre-Retirement Guide (REV 1/25), p. 13
• The tax-free share is a ratio of your personal contributions to your expected lifetime payments from the plan. It applies to your base benefit only, and only a portion is excludable each year until you outlive your actuarial life expectancy under IRS tables.Pre-Retirement Guide (REV 1/25), p. 13
• If you have federal tax withheld, Nevada PERS can figure it from your marital status and number of exemptions. Nevada PERS does not advise on tax matters and suggests a tax consultant for questions.Pre-Retirement Guide (REV 1/25), p. 9, Deductions
• As a retiree, your online Nevada PERS account shows your benefit payments, deductions and tax statements, and lets you update your tax withholding.Pre-Retirement Guide (REV 1/25), p. 14, Nevada PERS Website

Other protections in the same law

NRS 286.670 does more than exempt your benefit from Nevada taxes. And if you plan to buy service credit, tax-deferred savings can pay for it.

• The same law that exempts Nevada PERS benefits from state and local taxes also makes them not subject to garnishment, attachment or other process, or to bankruptcy law, and not assignable. The exceptions include court orders on child support, alimony or community property, and money you owe Nevada PERS.NRS 286.670(1)(b)-(d), (2); NRS 286.6703(1)
• You can use certain tax-deferred accounts, such as 401(k), 403(b) and 457 plans and IRAs, to pay for a purchase of service credit.Summary Plan Description (REV 8/25), p. 2, Purchase of Service

If you move

The sources say nothing about taxes in other states for retirees who move. Check the rules of the state you move to.

We don't estimate taxes on this site: the calculator shows your benefit before tax. See also Social Security and working after retirement.

Questions