Thirteen states have no Social Security tax at all

Thirteen states do not tax Social Security benefits: Alaska, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, and Wyoming. If you live in one of these states, your Social Security income is not subject to state income tax, regardless of how much you receive or what other income you have.

The remaining 37 states and the District of Columbia do tax Social Security benefits, though the rules vary widely. Some states tax it only if your total income exceeds a certain threshold. Others tax it the same way the federal government does — which means you may owe federal tax on benefits even if you live in a no-tax state.

Your state of residence matters more than your state of work history. If you move to a state that does not tax Social Security, you generally stop owing that tax in the year you establish residency there, even if you worked and paid taxes in another state for decades.

Key Takeaways

  • Thirteen states impose no state income tax on Social Security benefits: Alaska, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, and Wyoming.
  • The other 37 states and Washington, D.C., tax Social Security to varying degrees, with some using federal taxability rules and others setting their own income thresholds.
  • Your current state of residence determines whether you owe state tax on benefits, not the state where you worked or where you collected benefits before moving.
  • Federal tax on Social Security is separate from state tax and applies regardless of where you live, so moving to a no-tax state does not eliminate federal liability.

How the 37 states that do tax Social Security differ from each other

States that tax Social Security do not all use the same method. Some follow the federal taxability formula exactly, which means if your combined income (adjusted gross income plus nontaxable interest plus half your Social Security) exceeds certain thresholds, a portion of your benefits becomes taxable. For single filers, the federal threshold is $25,000; for married filing jointly, it is $32,000.

Other states set their own thresholds higher or lower. Connecticut, for example, does not tax Social Security for anyone over 55. Colorado taxes it only if your total income exceeds $24,000 for single filers and $32,000 for married couples — lower than the federal threshold. Kansas exempts the first $75,000 of retirement income, which includes Social Security.

A few states tax Social Security the same way they tax wages, with no special exemptions or thresholds. Vermont and West Virginia are among them. If you receive a large benefit and live in one of these states, you may owe tax on the full amount.

Federal tax on Social Security is separate from state tax

Even if you live in Alaska, Florida, or another no-tax state, you may still owe federal income tax on your Social Security benefits. The federal government taxes benefits using the same combined-income formula that many states use. If you are single and your combined income exceeds $25,000, up to 50 percent of your benefits may be taxable. If it exceeds $34,000, up to 85 percent may be taxable.

Married couples filing jointly face the same thresholds at $32,000 and $44,000. These thresholds have not changed since 1984, so they affect more retirees now than they did decades ago.

Moving to a state with no Social Security tax does not change your federal tax situation. You still report the same income on your federal return and pay the same federal tax. The state tax savings are real, but they are separate from what you owe the IRS.

Which states use federal rules and which set their own

States fall into three broad categories: those with no tax at all, those that follow federal taxability rules, and those that set their own rules.

States that follow federal rules include Arizona, Arkansas, Colorado, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Virginia, Washington, D.C., and Wisconsin. In these states, if you would owe federal tax on your benefits, you will likely owe state tax too — though some have additional exemptions for people over a certain age or with income below a certain level.

States that set their own rules include California, Connecticut, Illinois, Iowa, Louisiana, New Hampshire, Pennsylvania, and Tennessee. California, for example, does not tax Social Security at all, even though it taxes other retirement income. Illinois and Louisiana also exempt Social Security entirely. Connecticut and New Hampshire have age-based exemptions. Pennsylvania taxes only non-resident income, which excludes most Social Security for residents.

What "combined income" means for Social Security taxation

Combined income is not the same as your adjusted gross income. For Social Security tax purposes, combined income includes your adjusted gross income, plus any nontaxable interest (such as from municipal bonds), plus half of your Social Security benefits.

This formula can push you over a tax threshold even if your actual take-home income is modest. If you receive $20,000 in Social Security and $15,000 in pension income, your combined income is $35,000 (15,000 + 20,000 + half of 20,000). That $35,000 figure is what determines whether your benefits are taxable, not the $35,000 you actually receive.

Understanding this formula matters because it shows why retirees with seemingly low income sometimes owe tax on benefits. A financial advisor or tax professional can help you estimate your combined income and plan withdrawals from retirement accounts to stay below state and federal thresholds if possible.

How to find your state's specific rules

Your state's tax department website has the most current information about Social Security taxation. Search for "[your state] Social Security tax" or look for a retirement income section on the department's site.

If you live in a state that taxes Social Security, your state tax form or instructions will explain the calculation. Some states have worksheets built into the form itself. If the rules are unclear, you can call the state tax department directly — most have phone lines for tax questions — or work with a tax professional who knows your state's rules.

If you are considering moving to a no-tax state, contact that state's tax department before you move to confirm the current rules. Tax laws change, and what is true today may not be true next year. Getting written confirmation from the state is worth the effort if the tax savings are significant for your situation.

Frequently Asked Questions

If I move to a no-tax state, when do I stop paying state tax on Social Security?

You stop owing state tax in the year you establish residency in the new state, which usually means the year you move there. You will need to file a part-year return in both your old and new states for that year, reporting income earned in each state. The no-tax state will not tax your Social Security for any year you are a resident.

Does moving to a no-tax state reduce my federal tax on Social Security?

No. Federal tax on Social Security is determined by your combined income and applies the same way regardless of where you live. Moving to Alaska, Florida, or another no-tax state saves you state tax only, not federal tax. You will still report the same income on your federal return.

What if I worked in one state but moved to another before I started collecting Social Security?

Your state of work history does not matter. Only your state of residence when you collect benefits determines whether you owe state tax. If you worked in New York for 30 years but moved to Florida before you started collecting, Florida's rules explore — and Florida does not tax Social Security.

Can I reduce my Social Security tax by timing my withdrawals from retirement accounts?

Yes, in some cases. Because combined income includes nontaxable interest and half your Social Security benefits, withdrawing from traditional IRAs or 401(k)s in certain years can push you over a tax threshold. A tax professional can model different withdrawal strategies to show whether you could stay below the threshold by spreading withdrawals across multiple years or by withdrawing in years when other income is lower.

If my state taxes Social Security, is there a way to reduce the amount that is taxable?

The taxable amount is determined by a federal formula that most states follow. You cannot reduce it by changing where you live within a taxing state. However, you may be able to reduce your combined income by managing other income sources — for example, by delaying withdrawals from retirement accounts or by using tax-loss harvesting in investment accounts. A tax professional can review your specific situation.