Social Security is a key source of income for many retirees in the U.S. In fact, about 40% of Americans aged 65 and older depend on it for at least half of their income. However, while the federal government taxes Social Security benefits based on income, some states also impose their own taxes.
The good news? Most states don’t tax Social Security benefits, and in 2025, only nine states will continue to do so. Let’s dive into the details and see which states are tax-friendly for retirees.
State Tax Changes for 2025: States That Won’t Tax Social Security
A total of 41 states and Washington, D.C. will not tax Social Security benefits in 2025. These states include:
| State | No Social Security Tax? |
|---|---|
| Alabama | ✅ Yes |
| Alaska | ✅ Yes |
| Arizona | ✅ Yes |
| Arkansas | ✅ Yes |
| California | ✅ Yes |
| Delaware | ✅ Yes |
| Florida | ✅ Yes |
| Georgia | ✅ Yes |
| Hawaii | ✅ Yes |
| Idaho | ✅ Yes |
| Illinois | ✅ Yes |
| Indiana | ✅ Yes |
| Iowa | ✅ Yes |
| Kansas | ✅ Yes |
| Kentucky | ✅ Yes |
| Louisiana | ✅ Yes |
| Maine | ✅ Yes |
| Maryland | ✅ Yes |
| Massachusetts | ✅ Yes |
| Michigan | ✅ Yes |
| Mississippi | ✅ Yes |
| Missouri | ✅ Yes |
| Nebraska | ✅ Yes |
| Nevada | ✅ Yes |
| New Hampshire | ✅ Yes |
| New Jersey | ✅ Yes |
| New York | ✅ Yes |
| North Carolina | ✅ Yes |
| North Dakota | ✅ Yes |
| Ohio | ✅ Yes |
| Oklahoma | ✅ Yes |
| Oregon | ✅ Yes |
| Pennsylvania | ✅ Yes |
| South Carolina | ✅ Yes |
| South Dakota | ✅ Yes |
| Tennessee | ✅ Yes |
| Texas | ✅ Yes |
| Virginia | ✅ Yes |
| Washington | ✅ Yes |
| Wisconsin | ✅ Yes |
| Wyoming | ✅ Yes |
| Washington, D.C. | ✅ Yes |
These states have laws ensuring retirees can keep their full Social Security checks without worrying about state taxes.
State Tax Changes for 2025: 9 States That WILL Tax Social Security
While most states are Social Security-friendly, nine states will still impose state taxes on these benefits in 2025:
| State | Social Security Tax? |
|---|---|
| Colorado | ✅ Yes |
| Connecticut | ✅ Yes |
| Minnesota | ✅ Yes |
| Montana | ✅ Yes |
| New Mexico | ✅ Yes |
| Rhode Island | ✅ Yes |
| Utah | ✅ Yes |
| Vermont | ✅ Yes |
| West Virginia | ✅ Yes (until 2026) |
West Virginia is on track to phase out Social Security taxes completely by 2026, so retirees in that state will soon see relief.
How Much Can Retirees Save?
If you live in a state that doesn’t tax Social Security, your savings can add up quickly.
For example, if your state tax rate is 5% and you receive $30,000 in Social Security benefits per year, you would save:
$30,000 x 5% = $1,500 per year
Here’s a look at how much retirees in some states are expected to save in 2025:
| State | Estimated Annual Savings |
|---|---|
| Missouri | $309 million (total for all retirees) |
| Nebraska | $17 million (total for all retirees) |
Even in states that tax Social Security, some retirees may qualify for deductions based on age or income level. For example:
- In Colorado, residents aged 65+ can fully deduct federally taxed Social Security benefits.
- In 2025, Colorado will extend full exemptions to those 55-64 years old with an income below:
- $75,000 (individuals)
- $95,000 (couples filing jointly)
This means that not everyone in these states will pay Social Security taxes. It depends on the specific tax laws of your state.
Conclusion
State tax changes for 2025 bring good news for many retirees, as the majority of states will not tax Social Security benefits. While nine states will still impose some form of tax, deductions and exemptions can reduce the burden for lower-income seniors.
With Missouri, Nebraska, and Kansas eliminating these taxes, more retirees can look forward to keeping a larger portion of their Social Security income. Before making financial decisions, it’s always best to check your state’s specific tax rules.