Good news for retirees! If you receive Social Security benefits, you might not have to worry about state taxes—depending on where you live. Right now, 41 states, plus Washington, D.C., have decided not to tax Social Security income, making them attractive places for retirees looking to stretch their benefits.
Which States Don’t Tax Social Security?
If you live in any of these states, your Social Security benefits are safe from state taxes:
Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, and Wyoming.
Some states, like Kansas, have only recently stopped taxing Social Security benefits, making retirement even more appealing for residents.
What About the Other 9 States?
If your state isn’t on the list, don’t panic! Only nine states currently tax Social Security benefits:
Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.
However, some of these states are making changes. West Virginia, for example, is phasing out Social Security taxes entirely by 2026. Many other states offer exemptions based on income, so even if you live in a taxed state, you may not owe much—or anything at all.
Federal Taxes Still Apply
Even if your state doesn’t tax Social Security, the federal government might. If your total income (including Social Security, pensions, and other earnings) exceeds certain thresholds, a portion of your benefits could be taxable:
- If you make between $25,000 and $34,000 as an individual, up to 50% of your Social Security may be taxed.
- If you make over $34,000, up to 85% of your benefits could be taxed.
- For married couples filing jointly, these thresholds rise to $32,000 and $44,000.
What This Means for Retirees
Choosing a state that doesn’t tax Social Security could save retirees thousands of dollars over time. However, other factors like property taxes, cost of living, and healthcare access should also be considered.
If you’re planning for retirement, take a close look at how taxes will impact your finances. Consulting a financial advisor could help you make the best decision for your future.
With more states moving toward eliminating Social Security taxes, retirees have more options than ever to make the most of their hard-earned benefits!
