Introduction
Social Security benefits serve as a critical source of income for retired individuals, providing a financial safety net after years of contributing to the program. While the federal government taxes Social Security benefits to a certain extent, the tax treatment at the state level varies widely. Some states have opted to tax Social Security benefits as part of their overall income tax structure, while others have chosen to exempt these benefits from state income taxation.
The decision to tax or exempt Social Security benefits at the state level stems from various factors, including a state’s fiscal priorities, revenue needs, and tax policies. States that tax Social Security benefits typically view them as a form of income and subject them to taxation alongside other sources of income. These states argue that taxing Social Security benefits ensures a fair and balanced tax system, where all forms of income contribute to state revenues.
On the other hand, states that do not tax Social Security benefits often prioritize attracting retirees and promoting senior-friendly living environments. These states recognize the importance of Social Security benefits as a lifeline for retirees and aim to minimize the tax burden on their elderly population. By exempting Social Security benefits from state income taxation, these states strive to make retirement more affordable and attractive for seniors.
The decision to tax or exempt Social Security benefits also depends on a state’s overall tax structure and revenue needs. States with no or low income taxes may be more likely to exempt Social Security benefits, as they rely on other revenue streams, such as sales taxes or property taxes, to fund their budgets. Conversely, states heavily reliant on income taxes may be more inclined to tax Social Security benefits to generate additional revenue.
States That Tax Social Security Benefits
| State | Tax on Social Security | Income Tax Rate | Tax on Pensions | State-Local Tax Burden |
|---|---|---|---|---|
| Alabama | No | 2% | No | 9.8% |
| Alaska | No | 0% | No | 4.6% |
| Arizona | No | 2.59% | Yes | 9.5% |
| Arkansas | No | 2% | Yes | 10.2% |
| California | No | 1% | Yes | 13.5% |
| Delaware | No | 2.2% | Yes | 12.4% |
| Florida | No | 0% | No | 9.1% |
| Georgia | No | 1% | Yes | 8.9% |
| Hawaii | No | 1.4% | No | 14.1% |
| Idaho | No | 1% | Yes | 10.7% |
| Illinois | No | 4.95% | No | 12.9% |
| Indiana | No | 3.23% | Yes | 9.3% |
| Iowa | No | 0.33% | Yes | 11.2% |
| Kentucky | No | 5% | Yes | 9.6% |
| Louisiana | No | 1.85% | Yes | 9.1% |
| Maine | No | 5.8% | Yes | 12.4% |
| Maryland | No | 2% | Yes | 11.3% |
| Massachusetts | No | 5% | Yes | 11.5% |
| Michigan | No | 4.25% | Yes | 8.6% |
| Mississippi | No | 4% | No | 9.8% |
| Missouri | No | 1.5% | Yes | 9.3% |
| Nevada | No | 0% | No | 9.6% |
| New Hampshire | No | 5% | No | 9.6% |
| New Jersey | No | 1.4% | Yes | 13.2% |
| New York | No | 4% | Yes | 15.9% |
| North Carolina | No | 4.99% | Yes | 9.9% |
| Ohio | No | 2.77% | Yes | 10% |
| Oklahoma | No | 0.25% | Yes | 9% |
| Oregon | No | 4.75% | Yes | 10.8% |
| Pennsylvania | No | 3.07% | No | 10.6% |
| South Carolina | No | 0% | Yes | 8.9% |
| South Dakota | No | 0% | No | 8.4% |
| Tennessee | No | 0% | No | 7.6% |
| Texas | No | 0% | No | 8.6% |
| Virginia | No | 2% | Yes | 12.5% |
| Washington | No | 7% | No | 10.7% |
| Wisconsin | No | 3.54% | Yes | 10.9% |
| Wyoming | No | 0% | No | 7.5% |
| Colorado | Yes | 4.55% | Yes | 9.7% |
| Connecticut | Yes | 3% | Yes | 15.4% |
| Kansas | Yes | 3.1% | Yes | 11.2% |
| Minnesota | Yes | 5.35% | Yes | 12.1% |
| Montana | Yes | 1% | Yes | 10.5% |
| Nebraska | Yes | 2.46% | Yes | 11.5% |
| New Mexico | Yes | 1.7% | Yes | 10.2% |
| North Dakota | Yes | 1.1% | Yes | 8.8% |
| Rhode Island | Yes | 3.75% | Yes | 11.4% |
| Utah | Yes | 4.95% | Yes | 12.1% |
| Vermont | Yes | 3.35% | Yes | 13.6% |
| West Virginia | Yes | 3% | Yes | 9.8% |
States That Tax Social Security
Several states do impose state income taxes on Social Security benefits, but the level of taxation and the income thresholds for exemption or partial taxation vary. The states that tax Social Security benefits include Colorado, Connecticut, Kansas, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.
The 12 that tax social security benefits are :
1. Colorado
2. Connecticut
3. Kansas
4. Minnesota
5. Montana
6. Nebraska
7. New Mexico
8. North Dakota
9. Rhode Island
10. Utah
11. Vermont
12. West Virginia
States That Don’t Tax Social Security
The states that do not tax Social Security benefits are Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, and Wyoming. Retirees residing in these states can enjoy the full amount of their Social Security benefits without any state income tax implications.
The 38 states that don’t tax social security are :
1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. California
6. Delaware
7. Florida
8. Georgia
9. Hawaii
10. Idaho
11. Illinois
12. Indiana
13. Iowa
14. Kentucky
15. Louisiana
16. Maine
17. Maryland
18. Massachusetts
19. Michigan
20. Mississippi
21. Missouri
22. Nevada
23. New Hampshire
24. New Jersey
25. New York
26. North Carolina
27. Ohio
28. Oklahoma
29. Oregon
30. Pennsylvania
31. South Carolina
32. South Dakota
33. Tennessee
34. Texas
35. Virginia
36. Washington
37. Wisconsin
38. Wyoming
Which States Tax Social Security ?
Alabama
Tax on Social Security
No
Ranked in the US
#28
Ranked in the US
#30
Alabama does not tax Social Security benefits, providing retirees with the full amount of their benefits to support their retirement needs.
Alaska
Tax on Social Security
No
Ranked in the US
#44
Ranked in the US
#51
Alaska is another state that does not tax Social Security benefits, allowing retirees to enjoy their benefits without state income tax implications.
Arizona
Tax on Social Security
No
2.59%
Ranked in the US
#25
Ranked in the US
#37
Retirees in Arizona are exempt from state income taxes on their Social Security benefits, providing financial relief and enhancing the affordability of retirement.
Arkansas
Tax on Social Security
No
Ranked in the US
#29
Ranked in the US
#26
Arkansas exempts Social Security benefits from state income taxation, ensuring that retirees can fully utilize their benefits for their retirement expenses.
California
Tax on Social Security
No
Ranked in the US
#38
Ranked in the US
#5
Social Security benefits are not subject to state income taxes in California, providing financial relief to retirees in the Golden State.
Colorado
Tax on Social Security
Yes
4.55%
Ranked in the US
#11
Ranked in the US
#33
Colorado partially taxes Social Security benefits. The state allows retirees who are 65 years or older to exclude a specified amount of Social Security benefits from their taxable income.
Connecticut
Tax on Social Security
Yes
Ranked in the US
#22
Ranked in the US
#2
Connecticut is another state that taxes Social Security benefits. However, the impact of the tax can vary depending on the retiree's total income. Lower-income individuals may be exempt from the tax.
Delaware
Tax on Social Security
No
2.2%
Ranked in the US
#27
Ranked in the US
#9
Delaware does not tax Social Security benefits, allowing retirees to maximize their income and enjoy a tax-friendly retirement environment.
Florida
Tax on Social Security
No
Ranked in the US
#45
Ranked in the US
#40
As a popular retirement destination, Florida does not tax Social Security benefits, attracting retirees with its favorable tax policies.
Georgia
Tax on Social Security
No
Ranked in the US
#39
Ranked in the US
#43
Retirees in Georgia are exempt from state income taxes on their Social Security benefits, providing them with added financial security during their retirement years.
Hawaii
Tax on Social Security
No
1.4%
Ranked in the US
#35
Ranked in the US
#3
Hawaii does not tax Social Security benefits, ensuring that retirees can make the most of their benefits in this picturesque state.
Idaho
Tax on Social Security
No
Ranked in the US
#40
Ranked in the US
#22
Social Security benefits are not subject to state income taxes in Idaho, allowing retirees to fully utilize their benefits for their retirement needs.
Illinois
Tax on Social Security
No
4.95%
Ranked in the US
#8
Ranked in the US
#7
Illinois exempts Social Security benefits from state income taxation, providing financial relief and making retirement more affordable for its residents.
Indiana
Tax on Social Security
No
3.23%
Ranked in the US
#19
Ranked in the US
#38
Retirees in Indiana enjoy the full amount of their Social Security benefits, as the state does not tax them.
Iowa
Tax on Social Security
No
0.33%
Ranked in the US
#42
Ranked in the US
#18
Iowa does not tax Social Security benefits, allowing retirees to retain the entirety of their benefits for their retirement expenses.
Kansas
Tax on Social Security
Yes
3.1%
Ranked in the US
#20
Ranked in the US
#19
Kansas taxes Social Security benefits to some extent. However, certain provisions exist that may reduce the overall tax burden for retirees.
Kentucky
Tax on Social Security
No
Ranked in the US
#4
Ranked in the US
#34
Kentucky exempts Social Security benefits from state income taxes, enhancing the financial well-being of retirees in the Bluegrass State.
Louisiana
Tax on Social Security
No
1.85%
Ranked in the US
#32
Ranked in the US
#41
ocial Security benefits are not subject to state income taxes in Louisiana, providing retirees with increased financial security during their retirement years.
Maine
Tax on Social Security
No
5.8%
Ranked in the US
#2
Ranked in the US
#10
Retirees in Maine are exempt from state income taxes on their Social Security benefits, helping them maintain a higher standard of living in retirement.
Maryland
Tax on Social Security
No
Ranked in the US
#30
Ranked in the US
#17
Maryland does not tax Social Security benefits, ensuring that retirees can fully utilize their benefits for their retirement needs.
Massachusetts
Tax on Social Security
No
Ranked in the US
#5
Ranked in the US
#14
Social Security benefits are not subject to state income taxes in Massachusetts, enhancing the financial well-being of retirees in the state.
Michigan
Tax on Social Security
No
4.25%
Ranked in the US
#12
Ranked in the US
#46
Michigan exempts Social Security benefits from state income taxation, providing financial relief and making retirement more affordable for its residents.
Minnesota
Tax on Social Security
Yes
5.35%
Ranked in the US
#3
Ranked in the US
#11
Minnesota taxes Social Security benefits based on income thresholds. The state offers various exemptions and deductions that can reduce the taxable amount for retirees.
Mississippi
Tax on Social Security
No
Ranked in the US
#14
Ranked in the US
#31
Retirees in Mississippi enjoy the full amount of their Social Security benefits, as the state does not tax them.
Missouri
Tax on Social Security
No
1.5%
Ranked in the US
#34
Ranked in the US
#39
Missouri does not tax Social Security benefits, allowing retirees to retain the entirety of their benefits for their retirement expenses.
Montana
Tax on Social Security
Yes
Ranked in the US
#41
Ranked in the US
#25
Montana is another state that taxes Social Security benefits. However, the tax is based on income thresholds, and retirees may qualify for deductions and exemptions.
Nebraska
Tax on Social Security
Yes
2.46%
Ranked in the US
#26
Ranked in the US
#15
Nebraska imposes taxes on Social Security benefits, but the level of taxation depends on the retiree's total income. Certain exemptions and deductions are available.
Nevada
Tax on Social Security
No
Ranked in the US
#46
Ranked in the US
#35
Nevada is another state that does not tax Social Security benefits, attracting retirees with its favorable tax policies.
New Hampshire
Tax on Social Security
No
Ranked in the US
#6
Ranked in the US
#36
Social Security benefits are not subject to state income taxes in New Hampshire, providing financial relief to retirees in the Granite State.
New Jersey
Tax on Social Security
No
1.4%
Ranked in the US
#36
Ranked in the US
#6
New Jersey exempts Social Security benefits from state income taxation, ensuring that retirees can fully utilize their benefits for their retirement needs.
New Mexico
Tax on Social Security
Yes
1.7%
Ranked in the US
#33
Ranked in the US
#27
New Mexico partially taxes Social Security benefits. The state provides deductions that can reduce the overall tax liability for retirees.
New York
Tax on Social Security
No
Ranked in the US
#15
Ranked in the US
#1
Retirees in New York enjoy the full amount of their Social Security benefits, as the state does not tax them.
North Carolina
Tax on Social Security
No
4.99%
Ranked in the US
#7
Ranked in the US
#29
North Carolina does not tax Social Security benefits, allowing retirees to maximize their income and enjoy a tax-friendly retirement environment.
North Dakota
Tax on Social Security
Yes
1.1%
Ranked in the US
#37
Ranked in the US
#45
North Dakota taxes Social Security benefits, but retirees may qualify for deductions and exemptions, which can help lower their taxable income.
Ohio
Tax on Social Security
No
2.77%
Ranked in the US
#24
Ranked in the US
#28
Ohio exempts Social Security benefits from state income taxation, providing financial relief and making retirement more affordable for its residents.
Oklahoma
Tax on Social Security
No
0.25%
Ranked in the US
#43
Ranked in the US
#42
Social Security benefits are not subject to state income taxes in Oklahoma, enhancing the financial well-being of retirees in the state.
Oregon
Tax on Social Security
No
4.75%
Ranked in the US
#10
Ranked in the US
#21
Retirees in Oregon are exempt from state income taxes on their Social Security benefits, helping them maintain a higher standard of living in retirement.
Pennsylvania
Tax on Social Security
No
3.07%
Ranked in the US
#21
Ranked in the US
#24
Pennsylvania does not tax Social Security benefits, ensuring that retirees can fully utilize their benefits for their retirement needs.
Rhode Island
Tax on Social Security
Yes
3.75%
Ranked in the US
#16
Ranked in the US
#16
Rhode Island taxes Social Security benefits to some extent. The state offers exemptions and deductions that can mitigate the tax burden for retirees.
South Carolina
Tax on Social Security
No
Ranked in the US
#47
Ranked in the US
#44
Social Security benefits are not subject to state income taxes in South Carolina, providing financial relief to retirees in the state.
South Dakota
Tax on Social Security
No
Ranked in the US
#48
Ranked in the US
#48
Retirees in South Dakota enjoy the full amount of their Social Security benefits, as the state does not tax them.
Tennessee
Tax on Social Security
No
Ranked in the US
#49
Ranked in the US
#49
Tennessee does not tax Social Security benefits, allowing retirees to retain the entirety of their benefits for their retirement expenses.
Texas
Tax on Social Security
No
Ranked in the US
#50
Ranked in the US
#47
Social Security benefits are not subject to state income taxes in Texas, attracting retirees with its favorable tax policies.
Utah
Tax on Social Security
Yes
4.95%
Ranked in the US
#9
Ranked in the US
#12
Utah is another state that taxes Social Security benefits. However, the income thresholds and exemptions may help reduce the tax liability for retirees.
Vermont
Tax on Social Security
Yes
3.35%
Ranked in the US
#18
Ranked in the US
#4
Vermont taxes Social Security benefits based on income thresholds. Certain exemptions and deductions are available that can lower the overall tax burden.
Virginia
Tax on Social Security
No
Ranked in the US
#31
Ranked in the US
#8
Retirees in Virginia are exempt from state income taxes on their Social Security benefits, providing them with added financial security during their retirement years.
Washington
Tax on Social Security
No
Ranked in the US
#1
Ranked in the US
#23
Washington does not tax Social Security benefits, ensuring that retirees can fully utilize their benefits for their retirement needs.
West Virginia
Tax on Social Security
Yes
Ranked in the US
#23
Ranked in the US
#32
West Virginia taxes Social Security benefits, but the tax treatment varies depending on the retiree's total income. Some exemptions and deductions may be applicable.
Wisconsin
Tax on Social Security
No
3.54%
Ranked in the US
#17
Ranked in the US
#20
Wisconsin exempts Social Security benefits from state income taxation, providing financial relief and making retirement more affordable for its residents.
Wyoming
Tax on Social Security
No
Ranked in the US
#51
Ranked in the US
#50
Social Security benefits are not subject to state income taxes in Wyoming, enhancing the financial well-being of retirees in the state.
FAQs
How many states tax social security ?
In total, there are 12 states that tax social security benefits.
What states tax social security ?
The 12 states that tax social security benefits are Colorado, Connecticut, Kansas, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.
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