8 States Still Tax Social Security, but That Doesn’t Automatically Mean You’ll Have to Pay
Living in a state that taxes Social Security sounds like a financial gut punch, but the reality for most retirees is far more complicated and possibly much less painful than you'd expect.
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Social Security is a crucial stream of income for millions of retirees today. Without those monthly checks, many older Americans would simply not be able to make ends meet.
But you should know that in some cases, you may not be able to keep your Social Security checks in full. Not only can Social Security benefits be taxable at the federal level, but state taxes on benefits can also apply, depending on where you live.
That said, just because you live in a state that taxes Social Security doesn’t mean you’ll have to fork over a chunk of your benefits. So before you potentially make plans to ditch your home state, know what you’re dealing with.
The list of states taxing Social Security has shrunk
The list of states imposing taxes on Social Security benefits used to be larger than it is today. Recognizing what a crucial income stream Social Security is, several states have phased out their tax on benefits in recent years.
West Virginia, for example, finished phasing out its tax on Social Security benefits at the very start of 2026. Now, taxpayers in the state at all income limits aren’t on the hook.
There are eight states that still impose taxes on Social Security benefits. The list is as follows:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
If you live in one of these states, don’t panic, though. Middle- and lower-income retirees rarely pay state taxes on their Social Security benefits thanks to built-in exemptions.
In New Mexico, for example, Social Security recipients earning up to $100,000 a year won’t pay taxes on their benefits. For couples, that threshold rises to $150,000.
As such, if you live in a state with a tax on Social Security, don’t automatically assume you’re doomed. And don’t start packing your bags to relocate just yet. Instead, read up on exemptions, because you may find that you don’t actually have to pay taxes on your benefits at all.
Federal taxes on benefits still exist
While it can be easy enough to get out of paying state taxes on Social Security, don’t forget that taxes exist at the federal level as well. And those taxes kick in at very low levels of income.
Thanks to the new $6,000 senior tax deduction that came with the One Big Beautiful Bill Act, many Social Security recipients are currently exempt from having their benefits taxed at the federal level. Once that tax break expires in a few years, those taxes could kick in again.
If you’re worried about paying taxes on your Social Security benefits, know this: If you were an average earner and Social Security is your only source of income, you’re probably not going to have your benefits taxed. It’s when you’re looking at a moderate or larger retirement income that those taxes tend to apply.
Still, it’s not a bad idea to consult with a tax professional prior to filing for Social Security. They can give you a sense of the taxes you might be looking at and potentially help you find ways to eke out tax savings elsewhere.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, The Washington Post, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
