The Best States for Retirees: No Social Security Taxes Here
Social Security benefits are a crucial income source for millions of retirees.
As of December 2024, over 51 million Americans received retired worker benefits, with many relying on them for most or all of their retirement income.
Worth reading: Social Security Payment Schedule for February 2025: Here’s When You’ll Get Paid
Do States Tax Social Security Benefits?
The good news is that most states do not tax Social Security benefits.
As of 2025, 41 states and Washington, D.C. exempt Social Security from state taxation. These states include:
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Alabama
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Alaska
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Arizona
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Arkansas
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California
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Delaware
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Florida
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Georgia
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Hawaii
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Idaho
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Illinois
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Indiana
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Iowa
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Kansas
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Kentucky
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Louisiana
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Maine
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Maryland
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Massachusetts
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Michigan
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Mississippi
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Missouri
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Nebraska
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Nevada
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New Hampshire
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New Jersey
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New York
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North Carolina
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North Dakota
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Ohio
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Oklahoma
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Oregon
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Pennsylvania
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South Carolina
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South Dakota
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Tennessee
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Texas
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Virginia
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Washington
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Wisconsin
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Wyoming
Check these out:
Which States Tax Social Security Benefits?
The nine states that do tax Social Security benefits in some form are:
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Colorado
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Connecticut
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Minnesota
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Montana
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New Mexico
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Rhode Island
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Utah
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Vermont
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West Virginia
Some of these states, such as West Virginia, are actively working on phasing out Social Security taxes.
By 2026, West Virginia plans to eliminate the state income tax on Social Security for certain income brackets.
Federal Taxation of Social Security Benefits
Even if your state does not tax Social Security, you may still owe federal taxes on your benefits.
The IRS calculates taxability based on combined income, which includes:
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Adjusted Gross Income (AGI) – Non-Social Security earnings.
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Nontaxable Interest – Such as interest from U.S. Treasury bonds.
- 50% of Your Social Security Benefits – Half of your annual Social Security income.
How Federal Social Security Taxes Work?
The IRS applies the following thresholds to determine taxability:
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Single filers:
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If combined income is between $25,000 and $34,000, up to 50% of benefits may be taxable.
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If combined income is over $34,000, up to 85% of benefits may be taxable.
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Married couples filing jointly:
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If combined income is between $32,000 and $44,000, up to 50% of benefits may be taxable.
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If combined income is over $44,000, up to 85% of benefits may be taxable.
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For example, if a married couple filing jointly has a combined income over $44,000, 85% of their Social Security benefits could be subject to taxation.
While 41 states do not tax Social Security benefits, retirees must still account for federal tax implications.
Understanding how your state and the federal government tax Social Security can help you better plan for retirement.
For more details, visit the Social Security Administration website.
Previous article: Facing Homeownership Challenges on Social Security? These Programs Can Help
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