Social Security is an important part of many retirees’ income, helping them stay financially secure after they stop working. But understanding how Social Security benefits are taxed can play a big role in a retiree’s overall financial situation.
Since each state handles Social Security taxes in 2025 differently, it’s important to know how your state treats these benefits. Fortunately, more and more states are making changes that are good news for retirees.
States That Don’t Tax Social Security Benefits
As of 2024, 41 states, plus Washington D.C., do not tax Social Security benefits. That’s a huge relief for many retirees! Some of the states where Social Security benefits are not taxed include:
- Alabama
- Florida
- Georgia
- Illinois
- Maryland
- New Jersey
- Texas
- Washington
- Wyoming
These states are helping reduce the financial pressure on retirees, especially those living on a fixed income.
Additionally, some states have recently decided to stop taxing Social Security benefits. For example, Missouri and Nebraska have eliminated these taxes starting in 2024. This shift comes after pressure from advocacy groups, and it’s a big win for older residents. Also, read what Americans want to increase Social Security benefits for 2 groups.
Kansas also joined the trend in 2024 by ending its Social Security tax. West Virginia, although still taxing Social Security for now, is gradually phasing it out and plans to remove it completely by 2026.
States That Still Tax Social Security Benefits
While many states are moving toward eliminating or reducing taxes on Social Security, there are still nine states where these benefits are taxed. These states include:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia (until 2026)
However, not all Social Security recipients in these states will have to pay taxes. Each state has its own rules that depend on things like income level and filing status.
For example:
- In Colorado, residents aged 65 and older can already deduct their federally taxed Social Security benefits. Starting in 2025, this exemption will also apply to people between 55 and 64, but they will need to meet certain income requirements.
- In Connecticut, Social Security benefits aren’t taxed if your income is below certain thresholds: single filers with an adjusted gross income (AGI) under $75,000 and joint filers under $100,000.
- Rhode Island only taxes Social Security benefits if your federal AGI is above $95,800 for single filers or $119,750 for joint filers.
- Vermont offers a full exemption for single filers with incomes under $50,000 and joint filers earning less than $65,000.
What Else Should Retirees Consider?
While taxes on Social Security are important, they are not the only factor retirees should think about. There are many other things to consider when deciding where to retire, like:
- Cost of living
- Healthcare quality and availability
- Proximity to family and friends
- Local property or sales taxes
- Weather and climate
Retirees should also consider having multiple sources of income to help manage their taxes. For example, Roth conversions (turning a traditional IRA into a Roth IRA) can provide tax-free income in retirement. This strategy can help reduce overall taxable income and limit the tax impact on Social Security benefits.
FAQs on Social Security Taxes in 2025
Which states do not tax Social Security benefits?
41 states, including Florida, Texas, and New Jersey, don’t tax Social Security benefits.
Are there states that are eliminating Social Security taxes?
Yes! Missouri, Nebraska, and Kansas have recently decided to stop taxing Social Security benefits.
Do I have to pay taxes on Social Security in all states?
No, some states like Colorado and Connecticut have exemptions or specific income thresholds before they tax Social Security benefits.