Social Security benefits are a major source of income for millions of retirees, but whether those benefits are taxed depends heavily on where you live. While the federal government may tax a portion of your benefits based on income, only a minority of states impose their own tax on Social Security. Understanding these rules can help retirees choose tax‑friendly states, plan withdrawals, and avoid surprises at tax time.
This guide breaks down which states tax Social Security, how those taxes work, and what retirees should consider when evaluating their overall tax burden.
Do States Tax Social Security? The Short Answer
Only 10 states currently tax Social Security benefits. Even in these states, many retirees qualify for exemptions, income thresholds, or age‑based deductions that reduce or eliminate the tax.
The 10 states that tax Social Security are:
- Colorado
- Connecticut
- Kansas
- Minnesota
- Missouri
- Montana
- Nebraska
- New Mexico
- Rhode Island
- Utah
Every other state does not tax Social Security benefits.
States That Tax Social Security: Rules and Exemptions
Below is a breakdown of how each of the 10 states handles Social Security taxation. These rules change often, so retirees should review current state guidelines before filing.
Colorado
Colorado taxes Social Security benefits, but retirees can subtract a portion of their retirement income.
- Residents 65 and older can deduct up to $24,000 of retirement income, including Social Security.
- Those 55–64 can deduct up to $20,000.
For many retirees, this deduction eliminates the tax entirely.
Connecticut
Connecticut taxes Social Security only for higher‑income retirees.
- Single filers earning less than $75,000 pay no tax on benefits.
- Married couples earning less than $100,000 also pay no tax.
Above those thresholds, benefits may be partially taxed.
Kansas
Kansas taxes Social Security benefits for retirees with higher incomes.
- If your federal adjusted gross income (AGI) is under $75,000, your benefits are not taxed, regardless of filing status.
- Above $75,000, benefits may be taxed.
Minnesota
This state follows federal taxation rules but offers state‑level Social Security subtraction amounts.
- Retirees can deduct up to $5,840 (single) or $9,360 (married filing jointly), depending on income.
- Also higher‑income retirees may see reduced or no subtraction.
Minnesota is one of the stricter states for Social Security taxation.
Missouri
Missouri taxes Social Security but offers generous exemptions.
- Single filers with AGI under $85,000 pay no tax.
- Married couples under $100,000 also pay no tax.
Most retirees qualify for full exemption.
Montana
Montana taxes Social Security using a formula similar to federal rules but with different income thresholds.
- Up to 85% of benefits may be taxable depending on income.
- Montana does not offer the same deductions or exemptions found in other states.
This makes Montana one of the more aggressive states in taxing benefits.
Nebraska
Nebraska has been phasing out Social Security taxes.
- As of recent legislation, many retirees qualify for partial or full exemptions.
- Nebraska plans to fully eliminate Social Security taxes in the coming years.
Retirees should check the current year’s phase‑out schedule.
New Mexico
New Mexico taxes Social Security but offers income‑based exemptions.
- Retirees with AGI under $100,000 (single) or $150,000 (married) may qualify for deductions that reduce or eliminate the tax.
Rhode Island
Rhode Island taxes Social Security but provides exemptions for older, lower‑income retirees.
- You must be at least 65.
- Income must be below $95,800 (single) or $119,750 (married) to qualify for exemptions.
Utah
Utah used to tax Social Security aggressively but now offers a credit that offsets most or all of the tax.
- The credit phases out at higher income levels.
- Also, many retirees end up paying no tax on benefits.
States That Do NOT Tax Social Security
The remaining 40 states and Washington, D.C. do not tax Social Security benefits at all.
This includes popular retirement destinations such as:
- Florida
- Texas
- Arizona
- Nevada
- Tennessee
- Wyoming
- South Dakota
- Washington
- North Carolina
- Georgia
These states offer retirees predictable tax treatment and often lower overall tax burdens.
How Federal Taxes Affect Your Benefits
Even if your state doesn’t tax Social Security, the IRS may tax up to 85% of your benefits depending on your combined income:
- Single filers:
- Below $25,000 → No tax
- $25,000–$34,000 → Up to 50% taxable
- Above $34,000 → Up to 85% taxable
- Married filing jointly:
- Below $32,000 → No tax
- $32,000–$44,000 → Up to 50% taxable
- Above $44,000 → Up to 85% taxable
State taxes are separate from federal taxes, so retirees must consider both.
Choosing a Tax‑Friendly State for Retirement
When evaluating where to retire, Social Security taxes are only one factor. Retirees should also consider:
- State income tax rates
- Property taxes
- Sales taxes
- Taxes on pensions and IRA withdrawals
- Cost of living
- Healthcare access
A state with no Social Security tax may still have high property taxes or expensive housing.
Key Takeaway
Only 10 states tax Social Security, and most offer exemptions that shield lower‑ and middle‑income retirees. For many Americans, choosing a state that does not tax benefits can significantly increase retirement income and reduce long‑term tax burdens.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.