Retirement is meant to be a time to relax, enjoy your hard-earned savings, and spend time with family and hobbies. But one thing every retiree must account for is taxes. Social Security benefits, which form the backbone of income for millions of Americans, are subject to both state and federal taxation.
Understanding which states tax benefits, how federal taxes work, and strategies to minimize taxes can save thousands of dollars and protect your nest egg. This guide gives a comprehensive, easy-to-follow overview.
Which States Tax Social Security? A Complete List
States That Do Not Tax Social Security Benefits (42 + D.C.)
The following states currently do not tax Social Security benefits, giving retirees an advantage in keeping more of their income:
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, West Virginia, Wisconsin, Wyoming, Washington D.C.
Tip: West Virginia recently removed its Social Security tax in 2026, joining the growing list of retiree-friendly states.
States That Tax Social Security Benefits (8 States)
Eight states still tax Social Security benefits, often based on income thresholds:
Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont
Pro Insight: States that eliminate Social Security taxes can attract retirees who bring pensions and spending power into the local economy. Keep an eye on legislation, as some states may phase out taxes in the coming years.
Federal Taxes on Social Security Benefits
Even if your state doesn’t tax Social Security, federal taxes may still apply. The IRS calculates taxes based on your “combined income”:
Combined Income = Adjusted Gross Income (AGI) + ½ of Social Security Benefits + Tax-Exempt Interest
Federal Tax Thresholds
| Filing Status | 0% Taxable | Up to 50% Taxable | Up to 85% Taxable |
|---|---|---|---|
| Single | Less than $25,000 | $25,000–$34,000 | More than $34,000 |
| Married Filing Jointly | Less than $32,000 | $32,000–$44,000 | More than $44,000 |
Note: These percentages indicate the portion of Social Security benefits that may be taxed, not the tax rate itself. The eligible amount is added to your other taxable income and taxed at your ordinary rate.
Example Calculation
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AGI: $20,000
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Social Security Benefits: $30,000
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Tax-Exempt Interest: $2,000
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Combined Income: $37,000
For a single filer:
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Up to 85% of Social Security benefits ($25,500) may be taxed.
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If in the 12% tax bracket → $3,060 in federal taxes.
Practical Tips for Reducing Social Security Taxes
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Choose Retirement State Wisely
Retirees can significantly reduce their tax burden by living in a state that does not tax Social Security. This is especially important for those with other income sources, such as pensions or investments. -
Manage Income Levels
Federal taxation depends on combined income. By planning withdrawals from 401(k)s, IRAs, and other accounts, retirees can keep their combined income below federal thresholds. -
Consider Timing of Social Security Claims
Delaying benefits may increase monthly payments, but could also increase taxable income. Work with a financial planner to balance higher benefits with potential tax impacts. -
Leverage Tax-Advantaged Accounts
Using Roth IRAs or other tax-free accounts can reduce AGI and lower the portion of Social Security subject to federal taxes.
Visual Guide: Taxation by State
| State | Taxes Social Security? |
|---|---|
| Alabama | ❌ No |
| Alaska | ❌ No |
| Arizona | ❌ No |
| Arkansas | ❌ No |
| California | ❌ No |
| Colorado | ✅ Yes |
| Connecticut | ✅ Yes |
| Delaware | ❌ No |
| Florida | ❌ No |
| Georgia | ❌ No |
| Hawaii | ❌ No |
| Idaho | ❌ No |
| Illinois | ❌ No |
| Indiana | ❌ No |
| Iowa | ❌ No |
| Kansas | ❌ No |
| Kentucky | ❌ No |
| Louisiana | ❌ No |
| Maine | ❌ No |
| Maryland | ❌ No |
| Massachusetts | ❌ No |
| Michigan | ❌ No |
| Minnesota | ✅ Yes |
| Mississippi | ❌ No |
| Missouri | ❌ No |
| Montana | ✅ Yes |
| Nebraska | ❌ No |
| Nevada | ❌ No |
| New Hampshire | ❌ No |
| New Jersey | ❌ No |
| New Mexico | ✅ Yes |
| New York | ❌ No |
| North Carolina | ❌ No |
| North Dakota | ❌ No |
| Ohio | ❌ No |
| Oklahoma | ❌ No |
| Oregon | ❌ No |
| Pennsylvania | ❌ No |
| Rhode Island | ✅ Yes |
| South Carolina | ❌ No |
| South Dakota | ❌ No |
| Tennessee | ❌ No |
| Texas | ❌ No |
| Utah | ✅ Yes |
| Vermont | ✅ Yes |
| Virginia | ❌ No |
| Washington | ❌ No |
| West Virginia | ❌ No |
| Wisconsin | ❌ No |
| Wyoming | ❌ No |
| Washington D.C. | ❌ No |
✅ = Taxes Social Security
❌ = Does Not Tax Social Security
Pro Tip: States that do not tax Social Security can help retirees retain more income, making relocation or careful planning worth considering.
Key Takeaways
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Most states (42 + D.C.) do not tax Social Security, giving retirees a financial advantage.
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Eight states still tax Social Security, typically based on income levels.
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Federal taxes depend on combined income, which includes AGI, tax-exempt interest, and half of Social Security.
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Smart planning—managing income, choosing the right state, timing benefits, and using tax-advantaged accounts—can minimize taxes and maximize retirement income.
Social Security is more than a safety net. When planned strategically, it can be a reliable foundation for a financially secure and enjoyable retirement.
