41 States Where Social Security Is Tax-Free

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In contrast to the widespread misunderstanding, Social Security benefits can Social Security recipients with significant additional income sources may find up to 85% of their benefits subject to taxation. Actually, taxes levied on Social Security benefits constitute a key funding mechanism for the program itself.

The positive aspect is that generally, Social Security isn’t subject to taxation at the state level. Out of 50 states, 41 don't impose taxes on Social Security income. Moreover, many of those few states that do apply taxes follow much more lenient guidelines compared to the federal regulations.

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41 states that exempt Social Security income from taxes

I'll cut to the chase. Should your state appear on this alphabetically ordered list below, it does not impose any taxes: Social Security benefits for the 2025 tax year:

  • 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 (state and D.C.)
  • Wisconsin
  • Wyoming

If your state is listed here, your Social Security income is exempt from state income tax irrespective of the amount of extra retirement income you may have or whether you do not qualify for other taxes. still working .

Certainly, certain states do not impose any income tax at all. However, in many instances, the exemptions for Social Security benefits can also result in significant savings. To illustrate, suppose you get an annual amount of $20,000 from Social Security and reside in my native state of South Carolina, where the highest marginal tax rate reaches up to 7%. In this scenario, you might save approximately $1,400 annually.

Additionally, this list may expand over time. As an illustration, West Virginia is gradually eliminating taxes on Social Security benefits with plans for them to completely cease by 2026.

What would happen if you reside in one of the remaining nine states?

Given the information from the preceding section, we can see that nine states continue to impose taxes on Social Security benefits in various degrees. These states include Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.

In many instances, though, the guidelines governing Social Security taxes are more lenient compared to those enforced by the IRS. For instance, Colorado imposes taxes on Social Security benefits solely for recipients younger than 65 whose income exceeds specific thresholds.

Simply one aspect of the tax calculation.

If you’re a retiree living in one of the nine states that levy taxes on Social Security benefits, it may seem like an unfortunate situation. However, remember that this factor alone doesn’t determine how tax-friendly—or unfriendly—a state is overall. Often, those same states with taxes on Social Security tend to have relatively low rates for other kinds of taxes.

For example, Montana has a tax on Social Security benefits for some residents but is also one of just five states with no state sales tax. Other states on the list have property taxes that are well below the national average.

In essence, although being taxed on your Social Security benefits is definitely not ideal, it's crucial to take into account the overall taxation scenario within a state.

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Check out "The Hidden Truths of Social Security" »

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