Where you choose to retire can have a big impact on your finances, and state taxes are an important part of the picture. The good news is that most states don't tax Social Security benefits at all. In fact, only a small number still impose a tax, and even those states often offer income-based exemptions or credits that eliminate the tax for many retirees.
States That Don't Tax Social Security Benefits
As of 2026, 42 states and Washington, D.C., do not tax Social Security benefits.
This group includes:
- States with no broad-based personal income tax, such as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
- States that have a personal income tax but specifically exempt Social Security benefits from taxation.
In recent years, several states—including Kansas, Missouri, Nebraska, and West Virginia—have expanded or phased out taxes on Social Security benefits, making retirement income more tax-friendly. If you live in one of these states, your Social Security benefits generally won't be subject to state income tax.
States That Still Tax Social Security Benefits
As of 2026, only eight states continue to tax Social Security benefits in some form. Most, however, provide generous exemptions, deductions, or tax credits that protect many low- and middle-income retirees.
Colorado
Colorado allows significant deductions based on age and adjusted gross income (AGI), which means many retirees pay little or no state tax on their Social Security benefits.
Connecticut
Social Security benefits are fully exempt for single filers with a federal AGI below 5,000 and married couples filing jointly with an AGI below 00,000.
Minnesota
Minnesota offers income-based exemptions that phase out gradually as income rises, reducing or eliminating taxes for many retirees.
Montana
Montana generally follows the federal rules for determining taxable Social Security benefits, although lower-income retirees may qualify for exemptions or reduced taxation.
New Mexico
New Mexico exempts Social Security benefits for taxpayers with income below certain AGI limits, with higher-income households potentially paying tax on part of their benefits.
Rhode Island
Eligible retirees who have reached full retirement age may qualify for a full exemption if their income falls below the state's limits.
Utah
Utah taxes retirement income using its flat income tax but provides a tax credit that eliminates or reduces the tax for many retirees, depending on income.
Vermont
Vermont offers full or partial exemptions based on income, with higher-income retirees receiving smaller tax benefits.
At a Glance
| State Tax Policy | Number of States | What It Means |
|---|---|---|
| No tax on Social Security benefits | 42 states + Washington, D.C. | Social Security benefits are fully exempt from state income tax. |
| Tax benefits under certain conditions | 8 states | Benefits may be taxable, but most of these states offer income-based exemptions, deductions, or credits that reduce or eliminate the tax for many retirees. |
Before You Relocate for Tax Reasons
State tax laws can change from year to year, so it's worth looking beyond whether a state taxes Social Security benefits. Property taxes, sales taxes, retirement account taxation, estate taxes, and the overall cost of living can all affect your retirement budget.
If you're considering a move, compare both the federal and state tax rules that apply to your situation. A tax professional or financial planner can help you understand how your retirement income—including Social Security, pensions, and retirement account withdrawals—would be taxed in your current state versus a new one.