While most Americans are not required to pay state taxes on their Social Security benefits, retirees in a small number of states may still see a portion of their monthly checks subject to taxation. Although the trend in recent years has been overwhelmingly toward eliminating such taxes, fewer than a dozen states continue to impose them, often based on income thresholds similar to those used by the federal government.
According to data compiled by Fidelity Investments, states that still tax Social Security benefits include Montana, Utah, Colorado, New Mexico, Minnesota, Connecticut, Rhode Island, and Vermont. In each of these states, tax liability depends largely on a retiree’s adjusted gross income, filing status, and in some cases, age.
How State Taxation of Social Security Works
Unlike the federal government, which taxes Social Security benefits based on combined income thresholds set decades ago, states have considerable flexibility in how—or whether—they tax those benefits. Most states have opted not to tax Social Security at all, recognizing the importance of retirement income for seniors living on fixed budgets.
For the states that do impose taxes, the rules vary widely. Some provide full exemptions below certain income levels, while others allow partial deductions or credits. In general, higher-income retirees are more likely to face state taxation, while lower- and middle-income seniors are often shielded.
In Montana, for example, Social Security benefits are fully deductible for single filers with an adjusted gross income under $25,000 and for married couples filing jointly with incomes below $32,000. Above those thresholds, benefits may be partially or fully taxed depending on total income.
Utah has taken steps to significantly reduce the number of retirees affected. In 2025, the state legislature raised the income threshold for exemption, eliminating taxes on Social Security benefits for single filers earning up to $54,000 and for married couples filing jointly earning up to $90,000.
“Once again, we are prioritizing caring for seniors on fixed incomes, supporting young families and championing upward mobility for all Utahns,” Utah Senate President J. Stuart Adams said in a statement earlier this year. “Thanks to Utah’s robust economy and our steadfast conservative policies, we’re putting money back where it belongs—with the people who earned it.”
States Moving Away From Taxing Benefits
The number of states taxing Social Security benefits has steadily declined over the past decade, as lawmakers across the political spectrum have argued that such taxes place an unnecessary burden on retirees.
Kansas and Missouri eliminated state taxes on Social Security benefits entirely in 2024, joining a growing list of states that have opted to exempt retirement income. Nebraska began phasing out its tax in 2022, excluding 40 percent of benefits that year. The exemption increased to 60 percent in 2023 and 80 percent in 2024, with full exemption taking effect for the 2025 tax year.
West Virginia has also taken a gradual approach. The state reduced the taxable portion of Social Security income by 35 percent in early 2024, increased the reduction to 65 percent for the 2025 tax year, and will fully eliminate the tax beginning in 2026.
These changes reflect a broader recognition of Social Security’s role in retirement security. Social Security benefits account for approximately one-fourth of the entire federal budget and represent a primary source of income for millions of older Americans.
Federal Tax Relief Expands Protections
In addition to state-level reforms, recent federal legislation has further reduced the tax burden on seniors. In July, President Donald Trump signed the “One Big Beautiful Bill” into law, a sweeping package that included an additional $6,000 tax deduction for Americans aged 65 and older through 2028.
The Social Security Administration praised the legislation, calling it “a landmark piece of legislation that delivers long-awaited tax relief to millions of older Americans.”
“This is a historic step forward for America’s seniors,” Social Security Commissioner Frank Bisignano said. “For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
According to a June 2025 analysis by the U.S. Council of Economic Advisers, approximately 88 percent of all Americans receiving Social Security income—about 51.4 million seniors—will pay no taxes on their benefits under the new law.
“This amounts to the largest tax break in history for America’s seniors,” the White House said in a statement. “Promises made, promises kept.”
What Retirees Should Consider
Despite the expanding exemptions, retirees are still encouraged to review their state’s tax rules carefully, particularly if they are considering relocating or planning long-term retirement budgets. In some states, even modest changes in income—such as withdrawals from retirement accounts or part-time work—can affect whether Social Security benefits are taxed.
Financial planners note that while state taxation may not be the most significant expense retirees face, it can influence overall affordability, especially for those living on fixed incomes. States that do not tax Social Security benefits often promote that policy as a selling point for retirees.
As more states move toward full exemption and federal protections continue to expand, the overall tax landscape for Social Security recipients has become more favorable. However, for retirees living in the remaining states that still impose taxes, understanding eligibility thresholds and available deductions remains essential.
With Social Security continuing to serve as a financial lifeline for tens of millions of Americans, policymakers at both the state and federal levels appear increasingly aligned in their efforts to reduce the tax burden on retirees—a trend that experts expect will continue in the years ahead.
Emily Johnson is a critically acclaimed essayist and novelist known for her thought-provoking works centered on feminism, women’s rights, and modern relationships. Born and raised in Portland, Oregon, Emily grew up with a deep love of books, often spending her afternoons at her local library. She went on to study literature and gender studies at UCLA, where she became deeply involved in activism and began publishing essays in campus journals. Her debut essay collection, Voices Unbound, struck a chord with readers nationwide for its fearless exploration of gender dynamics, identity, and the challenges faced by women in contemporary society. Emily later transitioned into fiction, writing novels that balance compelling storytelling with social commentary. Her protagonists are often strong, multidimensional women navigating love, ambition, and the struggles of everyday life, making her a favorite among readers who crave authentic, relatable narratives. Critics praise her ability to merge personal intimacy with universal themes. Off the page, Emily is an advocate for women in publishing, leading workshops that encourage young female writers to embrace their voices. She lives in Seattle with her partner and two rescue cats, where she continues to write, teach, and inspire a new generation of storytellers.
