If you’re planning where to spend your retirement years, state taxes on Social Security can make a real difference in your monthly budget. The good news for 2026: the vast majority of states don’t tax Social Security benefits at all. Here’s the full breakdown of which states do, which don’t, and how much you’d actually owe if you live in one of the states that still taxes benefits.
How Many States Tax Social Security Benefits in 2026?
As of 2026, 42 states plus Washington, D.C. do not tax Social Security benefits at all. Only 8 states still tax some portion of Social Security income: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont.
It’s important to separate this from federal taxation. The federal government can tax up to 85% of your Social Security benefits depending on your “combined income” (adjusted gross income, plus nontaxable interest, plus half of your Social Security benefits) — and that federal rule applies no matter which state you live in.
The 8 States That Still Tax Social Security — and Their Exemptions
Even in these 8 states, most retirees end up owing little or nothing, because each state sets an income exemption or deduction that covers typical retirement income levels.
Colorado
Retirees age 65 and older can fully deduct Social Security benefits from their Colorado state taxable income. Younger retirees receiving benefits have a capped deduction.
Minnesota
Minnesota exempts Social Security from state tax entirely for single filers with adjusted gross income up to $86,410, and joint filers up to $110,780. Above those thresholds, a partial subtraction still applies on a sliding scale.
New Mexico
Benefits are exempt for single filers with AGI under $100,000 and joint filers under $150,000 — thresholds high enough that most retirees in the state pay nothing on their Social Security income.
Connecticut, Montana, Rhode Island, Utah, and Vermont
- Connecticut — exempts Social Security for AGI under roughly $75,000 (single) / $100,000 (joint); a partial exemption applies above that.
- Montana — follows a state-specific exemption formula tied to federal taxable Social Security income.
- Rhode Island — exempts benefits for filers at or below a set income threshold tied to full retirement age, adjusted annually.
- Utah — offers a nonrefundable retirement tax credit that offsets Social Security tax for lower- and middle-income retirees.
- Vermont — exempts benefits for single filers with AGI under about $50,000 and joint filers under about $65,000, with a partial exemption phasing out above that.
Bottom line: unless your retirement income is well above the median, you may still owe little or nothing in these 8 states, since their exemption thresholds are generally set above typical Social Security and pension income.
States With No Income Tax at All (Bonus Savings Beyond Social Security)
Nine states have no state income tax whatsoever: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. In these states, Social Security isn’t taxed simply because nothing is — pensions, 401(k) withdrawals, and IRA distributions also escape state income tax entirely.
Comparing the Options: A Quick Reference Table
Here’s a side-by-side look at how different types of states treat retirement income, so you can see where Social Security taxation fits into the bigger picture:
| State Category | Social Security Taxed? | Pensions/401(k)/IRA Taxed? | Example States |
|---|---|---|---|
| No income tax at all | No | No | Florida, Texas, Nevada, Washington |
| Income tax, but Social Security exempt | No | Usually yes | California, New York, Georgia, Arizona |
| Income tax, Social Security partially taxed (income-based exemption) | Sometimes, depends on income | Usually yes | Colorado, Minnesota, New Mexico, Vermont |
Social Security Isn’t the Only Thing to Check Before Relocating
Property Taxes
Some states with no income tax, like Texas and New Hampshire, have above-average property tax rates that can offset the income tax savings, especially for retirees who own a home outright.
Sales Tax
States like Tennessee and Washington rely more heavily on sales tax to fund state services. If you spend a significant share of your fixed income on everyday purchases, a higher sales tax rate can quietly eat into your savings.
State Taxation of Pensions and Retirement Accounts
A state that doesn’t tax Social Security may still fully tax pension income or 401(k)/IRA withdrawals. Always check each income source separately — the rules rarely match across every category of retirement income.
How to Estimate Your Own State Tax Bill
Before making a moving decision based on taxes alone, it’s worth running your actual numbers rather than relying on general state rankings.
- Use your prospective state’s Department of Revenue website or online tax calculator to estimate your specific liability.
- Consider a free consultation with an AARP Tax-Aide volunteer, who can walk through your Social Security, pension, and investment income together.
- Factor in property and sales tax alongside income tax — a state with no income tax isn’t automatically the cheapest option overall.
A Simple Decision Checklist
- If your total retirement income is modest and you live in one of the 8 taxing states — you likely qualify for a full or near-full exemption already, so relocating purely for tax reasons may not be worth it.
- If your retirement income is high (well above your state’s exemption threshold) and you live in one of the 8 taxing states — moving to a no-tax or exempt state could produce meaningful savings.
- If you already live in one of the 42 exempt states or a no-income-tax state — your Social Security benefits are already untouched by state tax, so focus your comparison on property and sales tax instead.
Frequently Asked Questions
Did any states stop taxing Social Security recently?
Yes. Several states — including Nebraska, Missouri, Kansas, and West Virginia — phased out their state tax on Social Security benefits in recent years, joining the growing majority of states that no longer tax them at all. Always double-check your specific state’s current rules each year, since tax laws can change with new legislative sessions.
Does moving to a no-tax state always save the most money in retirement?
Not necessarily. A state’s total tax burden includes property tax, sales tax, and how it treats pensions and retirement account withdrawals — not just income tax. Some no-income-tax states make up the difference with higher property or sales taxes, so it’s worth calculating your full picture before deciding to relocate.
Whether or not your state taxes Social Security is just one piece of a much bigger retirement financial picture. Before making any relocation decision, run the numbers on your specific income, property costs, and spending habits — the state with the lowest advertised taxes isn’t always the one that saves you the most in practice.