Why you can trust us We may earn money from links on this page, but commission does not influence what we write or the products we recommend. AOL upholds a rigorous editorial process to ensure what we publish is fair, accurate and trustworthy.&xa0; 9 states that still tax retirees' Social Security (and one that's quitting in 2026) Heather PettyNovember 2, 2025 at 2:55 PM 181 9 states that still tax retirees' Social Security (and one that's quitting in 2026) (DifferentBrian via Getty Images) If you're looking for the best state to live in after you retire, taxes may not be the first thing that ...
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9 states that still tax retirees' Social Security (and one that's quitting in 2026)
Heather PettyNovember 2, 2025 at 2:55 PM
181
9 states that still tax retirees' Social Security (and one that's quitting in 2026) (Different_Brian via Getty Images)
If you're looking for the best state to live in after you retire, taxes may not be the first thing that comes to mind. But whether or not your federally taxed Social Security benefits are also taxed at the state level can affect your budget and quality of life.
The good news? Most states won't tax your Social Security for the 2025 tax year — and another one, West Virginia, joins the list next year. Yet the policies of the states that do tax Social Security vary widely, offering exemptions and deductions to help offset what beneficiaries pay.
Here's how to know whether you owe taxes on your Social Security in your own state, including up-to-date details on changing rules, regulations and thresholds for 2026.
⭐️ Must read: 7 big changes coming to Social Security in 2026 (one that could shrink your check)
⭐️ AOL asks: Does Pres. Trump's One Big, Beautiful Tax Bill eliminate taxes on Social Security?
No. The bill signed into law on July 5, 2025, includes a temporary $6,000 tax deduction for seniors ages 65 and older earning modified adjusted gross income of up to $75,000 as single filers or up to $150,000 filing jointly. This deduction applies to all income, not only Social Security benefits.The tax deduction benefit starts to phase down for seniors earning more than $75,000 (or couples earning more than $150,000), with no benefit for single filers earning more than $175,000 (or couples earning more than $250,000). Without extensions, these benefits are due to expire at the end of Pres. Trump's term in 2028.
States that tax Social Security benefits
Nine states require retirees to pay income tax on their Social Security benefits for the 2025 tax year. But who is exempt and how much of your Social Security income is taxed varies by state law. Note too that states only tax that portion of your Social Security income that's considered taxable by the federal government.
1. Colorado
Colorado (Lightvision, LLC via Getty Images)
Colorado increased its flat income tax rate to 4.40% for 2025, up from 4.25% in 2024 due to the Taxpayer's Bill of Rights (TABOR) law.
The state offers exemptions for Social Security benefits based on your age and income:
If you're age 65 or older, you can deduct all federally taxed Social Security income from your state taxes
If you're ages 55 to 64, you can deduct all federally taxed Social Security income if your AGI is less than $95,000 for married taxpayers filing joint returns or $75,000 for single or head of household taxpayers.
If your adjusted gross income is higher, you can still deduct up to $20,000 in retirement income — including your Social Security benefits. Any more than that, and you'll pay the flat tax rate.
What to expect for the 2026 tax year
Colorado's income tax rate and Social Security exemption rules are expected to remain the same for 2026.
2. Connecticut
Connecticut (f11photo via Getty Images)
Connecticut residents can expect to pay an extra 3.0% to 6.99% in state income tax for 2025. But if you receive Social Security, you'll pay no state taxes on your benefits when your adjusted gross income (AGI) falls below the following thresholds:
$100,000 for married taxpayers filing joint returns
$75,000 for single or head of household taxpayers
Otherwise, no more than 25% of your received benefits is subject to state income tax.
What to expect for the 2026 tax year
Connecticut's Social Security tax rules and income thresholds are expected to remain unchanged for 2026.
3. Minnesota
Minnesota (jimkruger via Getty Images)
Minnesota's state income tax calculations are more complex than those of other states. The North Star State has four tax brackets, adding anywhere between 5.35% to 9.85% in taxes to your 2025 bill.
But you can deduct all of your Social Security benefits for state tax purposes if your adjusted gross income (AGI) falls below the following thresholds:
$108,320 for married taxpayers filing joint returns
$84,490 for single or head of household taxpayers
$54,160 for married taxpayers filing separately
The amount of your deduction decreases as you exceed those AGI levels — by 10% for every $4,000 of AGI for most taxpayers.
What to expect for the 2026 tax year
Minnesota's Social Security taxation structure, including income thresholds and the phaseout formula, is expected to continue unchanged in 2026. The state adjusts thresholds periodically, though, and so we'll update any changes as they become available.
4. Montana
Montana (Michael S. Lewis via Getty Images)
Not only did an attempted repeal of Montana's state tax on Social Security benefits fail in 2024, but several of the state's popular deductions were repealed as well. That leaves Montana's seniors paying a 5.9% state tax on all income over $42,200 (or $21,200 for single filers), including income from Social Security.
The good news is that Montana residents over age 65 can take a standard $5,660 deduction from their federal taxable income for the 2025 tax year.
What to expect for the 2026 tax year
Montana is expected to maintain its current Social Security taxation rules for 2026, with no legislative changes announced. We expect the $5,660 deduction for residents over 65 to continue.
5. New Mexico
New Mexico (Christian Heinrich via Getty Images)
New Mexico increased the income threshold for state tax on Social Security benefits in 2022.
For the 2025 tax year, your Social Security income isn't taxed if your income falls below the following thresholds:
$75,000 for married couples filing separately
$100,000 for single or head of household taxpayers
$150,000 for married couples filing jointly
All retirees with lower incomes are exempt from owing taxes on their Social Security benefits.
What to expect for the 2026 tax year
New Mexico's generous income thresholds are expected to remain in place for 2026, continuing to exempt most lower- and middle-income retirees from Social Security taxes.
6. Rhode Island
Rhode Island (DenisTangneyJr via Getty Images)
Rhode Island exempts Social Security benefits from its state tax in 2025 for retirees who are at or above the age of full retirement according to the Social Security Administration — currently age 67 — and whose adjusted gross income falls below the following thresholds:
$130,250 for married couples filing jointly
$104,200 for single or head of household taxpayers
$104,225 for married couples filing separately
These thresholds are adjusted every year for inflation.
What to expect for the 2026 tax year
Rhode Island's income thresholds are adjusted annually for inflation, so we expect slight increases to the AGI limits for 2026. We'll update any changes as they become available.
7. Utah
View of historic U.S. Route 163 running through famous Monument Valley in beautiful golden evening light at sunset on a beautiful sunny day with blue sky in summer, Utah, USA (TravelCouples via Getty Images)
While Gov. Spencer Cox proposed in 2024 eliminating taxes on Social Security altogether, retirees in Utah who exceed these stated adjusted gross income thresholds will still pay income tax on Social Security benefits at the state's flat rate of 4.5% for the 2025 tax year:
$90,000 for head of household or joint filers
$54,000 for single filers
$45,000 for married couples filing separately
But seniors and retirees may qualify for one of two tax credits:
If you were born in or before 1952, you may qualify for a retirement credit of up to $450. You'll need to complete the Retirement Credit worksheet to learn if you're eligible.
If you don't meet the age requirements for the retirement credit and received Social Security, disability or survivor benefits, you may be eligible for a tax deduction by completing the Social Security Credit worksheet.
Unfortunately, you can't qualify for both credits.
What to expect for the 2026 tax year
Utah's Social Security taxation rules and income thresholds are expected to remain stable for 2026. The state's 4.5% flat tax rate and available tax credits should remain unchanged.
8. Vermont
Vermont (jenifoto via Getty Images)
Seniors living in Vermont can expect to pay between 3.35% and 8.75% in state income tax, but whether your Social Security benefits are excluded depends on your filing status and adjusted gross income.
A bipartisan bill passed in June raises the income thresholds for Social Security exemption retroactively for the 2025 tax year:
Married couples filing jointly can fully deduct Social Security benefits from their state taxes if their income doesn't exceed $70,000.
All other senior taxpayers can fully deduct Social Security benefits from their state taxes if their income doesn't exceed $55,000.
Partial exemptions apply for incomes of $70,000 to $80,000 for married couples filing jointly (or $55,000 to $65,000 for single filer. Other exemptions include those for military retirement and civil service retirement, but you can't qualify for more than one exemption on your return.
What to expect for the 2026 tax year
Vermont's new income thresholds will remain in effect for 2026. Some legislators have proposed further phasing out of Social Security taxes entirely, but no confirmed changes are scheduled for next year.
9. West Virginia
West Virginia (JMichael-Photography via Getty Images)
West Virginia is slowly phasing out its state income tax on Social Security benefits, thanks to a new law passed in March 2024.
Percentages are based on your total Social Security benefits received and included in your federal adjusted gross income:
2024 tax year — 35% of Social Security benefits allowed as deduction
2025 tax year — 65% of Social Security benefits allowed as deduction
2026 tax year — 100% of Social Security benefits allowed as deduction
Before this decision, only seniors making up to $50,000 a year — or $100,000 if married filing jointly — could deduct Social Security benefits from West Virginia state taxes.
What to expect for the 2026 tax year
West Virginia fully eliminates state taxes on Social Security starting with the 2026 tax year, making the Mountain State one of the tax-friendliest for retirees.
🔍 Read more: Big tax changes are coming: 13 rules that may boost your refund — or shrink it
States that don't tax Social Security for 2025
Most states don't levy state income tax on Social Security benefits, and some of those don't have state income tax at all.
9 states with no state income tax
These states don't tax your income, though you could end up paying taxes on stocks and other investments, depending on the state:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming
32 states with state income tax that do not tax Social Security benefits
While these states and Washington, D.C., tax your income, each allows seniors and retirees to exclude Social Security benefits from state or district taxes:
Alabama
Arizona
Arkansas
California
Delaware
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
Nebraska
New Jersey
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
Virginia
Wisconsin
Washington, D.C.
Does the federal government tax Social Security benefits?
Yes. The federal government began taxing Social Security benefits with the 1984 tax year, but it wasn't until 1993 that tax rates and income thresholds were set to what today's seniors are expected to pay. Unlike state tax laws, which can shift and change with cost of living and inflation, the income thresholds and tax rates for federal income tax on Social Security haven't changed in 30 years.
These taxes are determined based on your filing status, as well as your "combined" income — which is your adjusted gross income, any non-taxable interest you earned, plus 50% of your Social Security benefits. Knowing your combined income, you can check it against the income thresholds listed below to understand taxes you'll owe to the federal government.
If married, filing jointly
All other taxpayers
• 85% of Social Security benefits taxed for incomes higher than $44,000• 50% of benefits taxed for incomes of $32,000 to $44,000• Benefits exempt from taxes for incomes lower than $32,000
• 85% of Social Security benefits taxed for incomes higher than $34,000• 50% of benefits taxed for incomes between $25,000 to $34,000• Benefits exempt from taxes for incomes lower than $25,000
🔍 Read more: Private jets, pools and pups: 7 wild tax deductions the IRS actually allows
5 tips to minimize your tax burden and lower your tax bill
When planning for retirement, consider these general tips throughout the year with your taxes in mind:
Keep your tax bracket as low as possible. Your retirement withdrawals are taxed as income, so the lower your tax bracket, the lower the tax rate on your withdrawals. And if you can keep your income below federal Social Security thresholds, you may be able to pay less in tax on that income as well.
Be strategic about retirement withdrawals. When you turn 73, you're required to withdraw a minimum distribution from your retirement accounts, including 401(k)s. But you might consider taking smaller distributions in your 60s to distribute the tax burden over several years and keep your income in a smaller tax bracket. Compare the taxes you'd save against the loss of interest you could earn to see if this strategy might work for you.
Convert your investments when taxes are low. If you have a low-income year or a year when taxes are lower for your tax bracket, it may be a good idea to convert your pre-tax IRAs to Roth IRAs, which aren't taxed on withdrawal. Taking the tax hit while you're gainfully employed can help reduce the tax burden in your retirement years. Learn more about drawing down and maximizing your retirement savings.
Diversify your portfolio with tax-free bonds. Consider investing in federal, state or municipal bonds, which are considered no-risk, tax-free investments. But be aware that you will have to include the income in your federal taxes once the bond matures.
Avoid paying penalties wherever possible. Talk with a tax professional to confirm you're handling tax liabilities without penalty and to be sure you're withdrawing the correct amount from your retirement accounts for your required minimum distribution (RMD). Failing to meet your RMD comes with a 25% penalty, in addition to the taxes you'll pay on withdrawal.
Enlist the help of an expert. The best way to make sure you're paying only what you owe is to sit down with a professional who has experience with pensions and retirement income. That way, you can ask questions about tax strategies specific to your benefits, savings and lifestyle and implement what makes sense. Get started with our guide to finding a trusted retirement advisor.
🔍 Read more: 9 tax breaks after 50 you might be missing out on
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About the writer
Heather Petty is a finance writer who specializes in consumer and business banking, personal and home lending, debt management and saving money. After falling victim to a disreputable mortgage broker when buying her first home, Heather set on a mission to help people avoid similar experiences when managing their own finances. Her expertise and analysis has been featured on MSN, Nasdaq, Credit.com and Finder, among other financial publications. When she's not breaking down the complexities of finance, she's a young adult mystery writer of an internationally acclaimed series — and counting.
Article edited by Kelly Suzan Waggoner
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