41 States That Won’t Tax Social Security Benefits in 2025: Are You in The List?

41 States That Won’t Tax Social Security Benefits in 2025: As millions of Americans approach retirement, understanding how Social Security benefits are taxed becomes crucial. While the federal government may tax up to 85% of these benefits based on income levels, state taxation varies significantly. The good news for retirees is that in 2025, 41 states, along with Washington, D.C., will not tax Social Security benefits, allowing retirees to retain more of their income.​

In 2025, Social Security remains a cornerstone of retirement income for millions of Americans, with approximately 40% of individuals aged 65 and older relying on it for at least half of their income, according to AARP. While federal taxation can apply to up to 85% of Social Security benefits based on income levels, state taxation varies significantly. The good news is that the majority of states—41 in total, plus Washington, D.C.—do not tax Social Security benefits, providing substantial relief for retirees.

41 States That Won’t Tax Social Security Benefits in 2025

The following states have chosen not to tax Social Security benefits in 2025:​

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Mississippi
• Missouri
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• South Carolina
• South Dakota
• Tennessee
• Texas
• Virginia
• Washington
• Wisconsin
• Wyoming
• Washington, D.C
•  

These states either have no state income tax or have specific provisions exempting Social Security benefits from taxation.​

States That Will Tax Social Security Benefits in 2025

As of 2025, the following nine states will tax Social Security benefits:​

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

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State-Specific Details:

• Colorado: Residents aged 65 and older can fully deduct federally taxed Social Security benefits on their state income tax returns. Starting in 2025, this exemption extends to those aged 55 to 64 with an adjusted gross income (AGI) of $75,000 or less for individuals and $95,000 or less for couples filing jointly.​
• Connecticut: Exempts Social Security income from taxation for single filers with AGI below $75,000 and joint filers below $100,000.​
• Minnesota: Offers partial exemptions based on income thresholds. For tax year 2025, married joint filers with AGI of $105,380 or less and single filers with AGI of $82,190 or less will not pay tax on their benefits. ​
•  Montana: Taxes Social Security benefits based on federal taxable amounts, with some adjustments.​
•  New Mexico: Provides exemptions for single filers with AGI up to $100,000 and joint filers up to $150,000.​
• Rhode Island: Exempts Social Security benefits for single filers with AGI up to $95,800 and joint filers up to $119,750.​
• Utah: Offers a nonrefundable tax credit to offset Social Security taxes for certain income levels.​
• Vermont: Provides partial exemptions based on income thresholds.​
• West Virginia: Is phasing out taxation on Social Security benefits. In 2025, 65% of Social Security benefits are exempt, with full exemption beginning in 2026. ​

Recent Changes in State Taxation of Social Security Benefits

Kansas:

In 2024, Kansas passed legislation exempting all Social Security benefits from state income tax, effective retroactively from January 1, 2024. Previously, the state taxed Social Security income for those with AGI above $75,000.

Missouri and Nebraska:

Both states decided to stop taxing Social Security benefits starting in 2024, joining the majority of states that do not tax these benefits. ​

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Impact on Retirees

The taxation of Social Security benefits can significantly affect retirees’ disposable income. For example, in Missouri, the elimination of the Social Security tax is estimated to save retirees collectively around $309 million annually. In Nebraska, the savings are approximately $17 million. ​To estimate individual savings, retirees can apply their state’s effective tax rate to their Social Security income. For instance, with a 5% state tax rate and $30,000 in Social Security benefits, a retiree would save $1,500 annually.

The elimination of state taxes on Social Security benefits can result in significant savings for retirees. For example, in Missouri, the collective annual savings for retirees are estimated at around $309 million, while in Nebraska, the savings are approximately $17 million.​

To calculate individual savings, retirees can apply their state’s effective tax rate to their annual Social Security benefits. For instance, with a 5% state tax rate and $30,000 in annual benefits, a retiree would save $1,500 annually by residing in a state that does not tax Social Security.

Federal Taxation of Social Security Benefits

At the federal level, Social Security benefits may be taxable based on combined income:​

Up to 50% of benefits may be taxable for individuals with combined income between $25,000 and $34,000, and for married couples between $32,000 and $44,000.​
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Up to 85% of benefits may be taxable for individuals with combined income above $34,000, and for married couples above $44,000.

Combined income includes adjusted gross income, non-taxable interest, and half of Social Security benefits.​

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