Thirteen states do not tax Social Security benefits at all

If you receive Social Security, the state you live in determines whether that income is taxed. Thirteen states have chosen not to tax Social Security benefits: Alabama, Alaska, Arkansas, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Maine, Mississippi, Missouri, Montana, and Nevada. If you live in one of these states, your Social Security payments are not subject to state income tax, regardless of your total income or filing status.

The remaining 37 states and Washington, D.C. do tax Social Security to some degree. However, most of those states offer partial exemptions or income thresholds that protect lower-income retirees from paying tax on their benefits. Understanding your state's specific rules matters because the tax treatment of Social Security can significantly affect your retirement income.

Key Takeaways

  • Thirteen states—Alabama, Alaska, Arkansas, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Maine, Mississippi, Missouri, Montana, and Nevada—do not tax Social Security benefits under any circumstances.
  • Most other states tax Social Security but offer exemptions or thresholds that protect retirees with lower combined income from paying tax on their benefits.
  • Combined income (adjusted gross income plus nontaxable interest plus half of Social Security benefits) determines whether you owe state tax on Social Security in most states.
  • If you moved to a no-tax state after retirement, you may still owe taxes to your former state on benefits received while you lived there.
  • Your federal tax obligation on Social Security is separate from state taxes and depends on your combined income regardless of where you live.

How the thirteen no-tax states handle Social Security

These thirteen states have written their tax codes to exclude Social Security benefits entirely from taxable income. This means if Social Security is your only income, you will owe no state income tax in any of these states. If you have other retirement income—pensions, investment earnings, or wages—that income may still be taxable, but the Social Security portion is protected.

Some of these states also offer additional tax breaks for retirees. For example, Illinois excludes not only Social Security but also all retirement income from pensions and retirement accounts from state taxation. Alaska has no state income tax at all, so Social Security is not taxed there as part of a broader tax structure. Nevada also has no state income tax. These three states offer the broadest protection for retirement income overall.

States that tax Social Security but offer partial exemptions

Twenty-one states tax Social Security but allow exemptions based on age, income level, or both. Colorado, Connecticut, Delaware, Florida, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia, and Wyoming fall into this category. The rules vary significantly from state to state.

Many of these states exempt Social Security entirely for residents over a certain age—typically 62 or 65. Others use a combined income threshold: if your combined income falls below a set amount, your Social Security is not taxed. Still others offer a dollar exemption, allowing you to exclude a certain amount of Social Security income from taxation. For example, some states allow you to exclude the first $6,000 or $12,000 of Social Security benefits. You need to check your specific state's rules because the thresholds and age cutoffs differ.

States that tax Social Security with few or no exemptions

Thirteen states tax Social Security benefits with limited or no exemptions: Colorado, Connecticut, Delaware, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, Rhode Island, and Vermont. In these states, your Social Security may be taxable if your combined income exceeds a threshold set by that state. Combined income is calculated as your adjusted gross income plus nontaxable interest plus half of your Social Security benefits.

The income thresholds vary. For example, some states use federal thresholds (combined income over $25,000 for single filers or $32,000 for married couples filing jointly), while others set their own limits. A few states, like Vermont and Rhode Island, tax Social Security more broadly and offer fewer exemptions. If you live in one of these states, you should review your state's tax forms or contact your state tax authority to determine whether your benefits are taxable.

What happens if you move to a no-tax state after retirement

Moving to a state that does not tax Social Security does not erase taxes you owed in your former state. If you received Social Security while living in a state that taxes it, you may still owe tax to that state on the benefits you received during the time you lived there. Your former state may continue to tax you on those benefits even after you move, depending on when you received them and that state's rules.

However, once you establish residency in a no-tax state, your Social Security benefits going forward will not be subject to that state's income tax. If you are planning a move specifically to reduce your tax burden, consult a tax professional or your state tax authority about the timing and any obligations to your former state. Some states have reciprocal agreements or specific rules about when residency changes take effect for tax purposes.

Federal taxation of Social Security is separate from state taxes

Your federal tax obligation on Social Security is independent of whether your state taxes it. The federal government taxes Social Security benefits based on your combined income, regardless of where you live. If your combined income exceeds $25,000 (single) or $32,000 (married filing jointly), up to 50 percent of your benefits may be subject to federal income tax. If your combined income exceeds $34,000 (single) or $44,000 (married filing jointly), up to 85 percent of your benefits may be taxable.

Living in a state that does not tax Social Security does not reduce your federal tax liability. You will still file a federal return and report your Social Security income if required. The advantage of living in a no-tax state is that you avoid state income tax on top of any federal tax you owe.

How to find your state's specific Social Security tax rules

Your state's tax authority website lists the rules for Social Security taxation in your state. Search for "[your state] Social Security tax" or visit your state's department of revenue or taxation website. Most states provide a tax guide or worksheet that walks you through calculating whether your benefits are taxable.

If you file taxes with a professional preparer or use tax software, the software will typically ask questions about your Social Security income and your state of residence, then calculate your state tax obligation automatically. If you have questions about your specific situation—especially if you moved states during the year or have income from multiple sources—contact your state tax authority directly or consult a tax professional familiar with your state's rules.

Frequently Asked Questions

If I live in a state that taxes Social Security, can I avoid the tax by moving?

You can avoid future taxation by moving to a no-tax state, but you may still owe tax to your former state on benefits you received while living there. The timing of your move and your former state's rules determine whether you have any remaining obligation. Moving solely to reduce taxes should be discussed with a tax professional to understand the full impact.

Does living in a no-tax state reduce my federal Social Security taxes?

No. Federal taxation of Social Security is the same in every state and depends only on your combined income. Living in a state that does not tax Social Security saves you only on state taxes, not federal taxes.

What is combined income and how do I calculate it?

Combined income is your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. Most states use this figure to determine whether your Social Security is taxable. Your tax software or state tax forms will walk you through the calculation, or you can ask your tax preparer to compute it for you.

If I have a pension and Social Security, will both be taxed in my state?

That depends on your state. Some states (like Illinois) exempt both pensions and Social Security. Others tax pensions but not Social Security, or vice versa. A few states tax both. Check your state's rules for each type of income separately.

Do I need to file a state tax return if I only have Social Security income in a no-tax state?

No. If you live in a state that does not tax Social Security and Social Security is your only income, you typically do not need to file a state return. However, if you have other taxable income, you may need to file. Check your state's filing requirements or contact your state tax authority.