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As of 2025, a significant majority of U.S. states-41 in total, along with Washington, D.C.-do not impose state income taxes on Social Security benefits.
This policy offers substantial financial relief to retirees, allowing them to retain more of their fixed incomes.
The number of states exempting Social Security benefits from taxation has increased over recent years, reflecting a broader trend toward tax relief for seniors.
States that do not tax Social Security benefits
The following states currently do not tax Social Security benefits:
- 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
- Wyoming
- Washington, D.C.
These states have implemented policies that exclude Social Security benefits from state income taxation, providing significant financial relief to retirees.
Understanding the tax policies
While these states do not tax Social Security benefits, it's important to note that some states may still tax other forms of retirement income, such as pensions or 401(k) distributions.
Therefore, retirees should consider the overall tax landscape of a state when planning their retirement. For instance, Delaware is highlighted as a tax-friendly state for retirees, not levying state or local sales tax, estate tax, or inheritance tax, and having a modest property tax rate.
Additionally, some states that do tax Social Security benefits offer exemptions or deductions for certain income levels or age groups. For example, in Minnesota, if Social Security is your only income, you do not have to pay taxes on it.
In Colorado, residents ages 65 and older have been able to fully deduct federally taxed Social Security benefits on their state income tax returns since tax year 2022. For 2025, that full exemption will expand to include those ages 55 to 64 with an adjusted gross income equal to or less than $75,000 for individuals or $95,000 for couples filing tly.
Therefore, while the majority of states do not tax Social Security benefits, it's crucial for retirees to research and understand the specific tax policies of the state they reside in or plan to move to. This ensures they can make informed decisions that align with their financial goals and retirement plans.
In summary, the trend of states exempting Social Security benefits from taxation is growing, providing retirees with increased financial security. However, it's essential to consider the broader tax environment, including taxes on other retirement income and overall cost of living, when evaluating potential retirement destinations.