8 states that still tax Social Security (and one that's quit in 2026)

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 2026 tax year — including West Virginia, which fully eliminates state taxes on these benefits this year, making the Mountain State one of the tax-friendliest for retirees.

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 to Social Security for 2026 (one that could shrink your check)

States that tax Social Security benefits in 2026

Eight states require retirees to pay income tax on their Social Security benefits for the 2026 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 maintains its flat income tax rate at 4.40% for 2026 under 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 2027 tax year

A bill introduced in January 2026 calls for eliminating the age cap for Social Security tax exemptions — matching the current benefit for those 65 and older. It’s currently making its way through the House Finance Committee.

2. Connecticut

Connecticut residents can expect to pay an extra 2.0% to 6.99% in state income tax for 2026. 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 2027 tax year

Connecticut’s Social Security tax rules and income thresholds are expected to remain unchanged for 2027.

3. Minnesota

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 2026 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 2027 tax year

Minnesota’s Social Security taxation structure, including income thresholds and the phaseout formula, is expected to continue unchanged in 2027. The state adjusts thresholds periodically, though, and so we’ll update any changes as they’re available.

4. Montana

Not only did an attempted repeal of Montana’s state tax on Social Security benefits fail in 2025, but several of the state’s popular deductions were repealed as well. That leaves Montana’s seniors paying state tax on federally taxable 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 when calculating taxes for 2026.

Broad tax reductions lowered the state’s 2026 income tax rates to 4.7% and 5.65%:

• Single filers pay 4.7% on the first $47,500, and then 5.65% above that

• Joint filers pay 4.7% on the first $95,000, and then 5.65% above that

What to expect for the 2027 tax year

Montana is expected to maintain its current Social Security taxation rules for 2027. However, the state lowers its top tax rate to 5.4% in 2027, down from 5.65%. The lower 4.7% tax rate will apply to the first $65,000 for single filers and $130,000 for joint filers.

The senior deduction for those of 65 is expected to continue in 2027.

5. New Mexico

New Mexico increased the income threshold for state tax on Social Security benefits in 2022.

For the 2026 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 2027 tax year

New Mexico’s generous income thresholds are expected to remain unchanged for 2027, continuing to exempt most lower- and middle-income retirees from Social Security taxes.

6. Rhode Island

Rhode Island exempts Social Security benefits from its state tax in 2026 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:

• $133,750 for married couples filing jointly

• $107,000 for single or head of household taxpayers

• $107,000 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 2027. We’ll update changes as they’re available.

7. Utah

While Gov. Spencer Cox proposed in December 2024 eliminating taxes on Social Security altogether, the state instead expanded the tax credit.

Retirees in Utah who exceed adjusted gross income thresholds still pay income tax on Social Security benefits at the state’s flat rate of 4.5% for the 2026 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.

• If you received Social Security, disability or survivor benefits, you may be eligible for the Social Security Benefits Credit.

Unfortunately, you can’t qualify for both credits. You need to choose the one with the most valuable benefit.

What to expect for the 2027 tax year

Utah’s Social Security taxation rules and income thresholds are expected to remain stable for 2027. The state’s 4.5% flat tax rate and available tax credits should remain unchanged.

8. Vermont

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 signed in 2025 raised the income thresholds for Social Security exemption for the 2026 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.

What to expect for the 2027 tax year

Vermont’s new income thresholds will remain in effect for 2027. Some legislators have proposed gradually phasing out of Social Security taxes entirely, but no confirmed changes are scheduled for next year.

🔍 Read more: 13 big tax changes in 2026 that can boost your refund

States that don’t tax Social Security for 2026

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

34 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.

• West Virginia

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.

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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:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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: Over 60? Don’t miss these 8 IRS breaks that can cut your tax bill

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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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