A solid foundation of financial security is the cornerstone upon which retirement dreams are constructed, and for many people in the United States, Social Security benefits provide the base of that stability. On the other hand, a significant number of retirees are taken aback when they discover that their Social Security benefits can be subject to taxation, not only by the federal government but also by the state governments.
Good news: the majority of states do not impose taxes on Social Security payments. There are a total of 41 states and the District of Columbia that do not levy any state taxes on these benefits. The majority of the nine states that do impose taxes on Social Security provide seniors with some relief by providing exclusions and credits that are depending on their income.
Major Alterations Since the Year 2024
A few of noteworthy changes have been made for the year 2025:
- Missouri has become the latest state to remove the tax on Social Security benefits from its list of states. At the conclusion of the year 2024, the state began the process of eliminating its Social Security taxation, which resulted in the year 2025 being the first year in which Social Security taxes were not collected.
- By the year 2026, West Virginia will have completely done away with its Social Security levies. Despite the fact that benefits are still subject to taxation this year, the state is well on its way to completely exempting earnings from Social Security within the next several years.
Good news for retirees who call these states home: the income from Social Security is not subject to taxation, which means that you can use a greater portion of your benefits to support the lifestyle you’ve worked so hard to achieve.
Why Does This Matter?
As the cost of groceries continues to rise and the price of gasoline continues to skyrocket, it is essential to maximize your income throughout retirement. Due to the fact that taxes merely lower the amount of money that seniors have in their pockets, many retirees rely on Social Security. It is imperative that you create a budget that accounts for the additional taxes that will be levied on your retirement income if you reside in a state that taxes Social Security.
States That Don’t Tax Social Security Benefits:
- Alabama – No state income tax, no Social Security tax.
- Arkansas – Social Security benefits are exempt from taxes.
- Florida – No income tax means no taxes on Social Security.
- Georgia – Social Security is not taxed in Georgia.
- Louisiana – No taxes on Social Security income.
- Oklahoma – Social Security is exempt from state income taxes.
- South Carolina – Social Security benefits are exempt from state income taxes.
- Tennessee – No income tax, so Social Security benefits are untouched.
- Texas – No income tax, so no Social Security tax.
- Virginia – Social Security income is exempt from taxes.
- Alaska – No state income tax means no taxes on Social Security.
- Arizona – Specific exemptions ensure Social Security benefits remain untaxed.
- California – Social Security benefits are free from state income taxes.
- Colorado – Retirees can deduct up to $24,000 of Social Security income from taxable income.
- Hawaii – Social Security income is exempt from taxes.
- Idaho – Offers exemptions for Social Security income.
- Illinois – Social Security benefits are not taxed.
- Indiana – Exempts Social Security income from taxation.
- Iowa – Social Security is exempt from Iowa’s state income tax.
- Mississippi – No taxes on Social Security benefits.
- New Hampshire – No income tax on Social Security, though other taxes apply.
- South Dakota – No income tax, so Social Security remains tax-free.
- Washington – No state income tax on Social Security.
- Wyoming – Social Security benefits are not taxed.
- Delaware – Social Security income is not counted for state income tax.
- Kentucky – Exempts Social Security from state taxation.
- Maine – Social Security is exempt from state income tax.
- New Jersey – No tax on Social Security income.
- New York – Social Security benefits are exempt from taxes.
- North Carolina – Social Security is free from state income taxes.
- Ohio – Social Security income is not taxed.
- Pennsylvania – Social Security benefits are exempt from state income taxes.
- West Virginia – Taxing Social Security benefits will end by 2026.
- Nevada – No income tax, so Social Security benefits are not taxed.
- Maryland – Social Security benefits are exempt from state income taxes.
- Massachusetts – Social Security is excluded from income tax.
- Michigan – Social Security benefits are exempt from income taxes.
- North Dakota – Social Security income is exempt unless other income exceeds a certain threshold.
- Oregon – Social Security is exempt from state taxes.
- Wisconsin – Social Security is not taxed at the state level.
- Missouri – Missouri has phased out Social Security taxes as of 2025.
Bonus: District of Columbia
Despite the fact that it is not a state, the District of Columbia does not impose taxes on recipients of Social Security benefits.
The Final Thoughts
Despite the fact that retirement is becoming increasingly difficult from a financial standpoint, these states provide much-needed help by abolishing taxes on Social Security income. You should take into consideration the potential impact that taxes on your Social Security could have on your budget and make appropriate preparations if you want to make the most of your retirement years. Maintain an awareness of any changes to state laws that may have an impact on the income you receive throughout retirement.
