Tax Changes Florida Retirees Need to Know About For 2025
Written by
Emily Fowler
Edited by
Angela Corry
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Florida’s tax-friendly reputation makes it a haven for retirees, with no state income tax, estate tax or inheritance tax. However, staying informed about upcoming federal tax changes is essential, as these can still impact financial planning.
Here’s what Florida retirees should know about taxes in 2025, and how they might affect their golden years:
Homestead Tax Amendment Offers Local Relief
The Florida Homestead Tax Amendment is a key tax-saving strategy for state retirees, according to Lisa Greene-Lewis, CPA and Tax Expert at TurboTax. The exemption will be tied to inflation starting in 2025, retirees could see their tax savings increase as inflation rises, offering more relief over time.
“Homeowners are permitted to reduce the assessed value of their home by $50,000, which in turn reduces their property taxes,” said Greene-Lewis.
Florida retirees who own their homes can save significantly, especially those on fixed incomes. Combined with the state’s lack of income tax, these savings help offset rising costs of living in popular retirement communities.
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IRA Charitable Donations Increase
In 2025, retirees can donate up to $108,000 tax-free from an IRA to charity, up from the current $105,000 limit. IRA owners aged 73 or older can make qualified charitable distributions (QCDs) tax-free, and these donations also count toward their required minimum distributions (RMDs). Typically, IRA distributions are taxable, but QCDs offer an exception.
“QCDs receive tax-free treatment without being part of itemized deductions, so they are available to retirees who do not itemize,” said Anne Gibson, Senior Legal Analyst at Wolters Kluwer, “The limit on QCDs is adjusted annually for inflation, so in 2025, a retiree will be able to donate up to $108,000 in this way.”
“Many retirees who have paid off their homes and no longer have big deductions find the QCDs to be an effective way to save money,” added Greene-Lewis. QCDs allow retirees to support local causes without increasing taxable income — a vital benefit for those on fixed incomes or navigating Florida’s property taxes.
Inherited Retirement Accounts
In 2025, the final IRS regulations on required minimum distributions (RMDs) under the SECURE Act are expected to go into effect. These regulations will solidify the “10-year rule” introduced by SECURE 1.0, which requires beneficiaries to empty inherited IRAs or 401(k)s within 10 years unless they fall into specific exempt categories.
For Florida retirees who plan to leave retirement savings to adult children or grandchildren, this could increase their heirs’ tax burden. Gibson recommends reviewing and potentially adjusting beneficiary designations with an estate planner to ensure legacies align with intentions.
Federal Estate and Gift Tax Adjustments
Since Florida doesn’t impose its own estate tax, federal changes are the primary concern for high-net-worth retirees in the state. Currently, individuals can transfer up to $10 million tax-free in gifts or estates, adjusted annually for inflation, and spouses can share their exclusions. However, this lifetime estate and gift tax exclusion may drop at the end of 2025.
“Unless Congress acts, the lifetime estate and gift tax exclusion will revert to $5 million per individual, adjusted annually for inflation, as part of the sunset of portions of the Tax Cuts and Jobs Act of 2017,” said Gibson, who suggests that Florida retirees should consider gifting assets now or consulting with estate planners to take full advantage of the current exclusion rates.
Social Security Taxation Uncertainty
Although Florida exempts Social Security income from state taxes, potential federal changes could affect retirees statewide. On the campaign trail, President-elect Trump proposed eliminating federal income tax on Social Security benefits.
“If this were to happen, it would likely be as part of the larger effort addressing the planned expiration of many provisions of the Tax Cuts and Jobs Act of 2017,” said Gibson. “Many provisions of this landmark tax bill will sunset at the end of 2025.”
If passed, this would significantly benefit Florida retirees reliant on Social Security for living expenses. For now, staying updated on developments in Washington, D.C., remains essential.
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