What States Tax Social Security Benefits?

Social Security benefits provide income for millions of Americans in retirement, or in cases of disability or the death of a family breadwinner. The tax treatment of these benefits is not uniform and can be a source of confusion. While the federal government has its own rules for taxation, the approach at the state level varies. This impacts the net income of retirees differently depending on where they live.

Federal Taxation of Social Security

The federal government may tax a portion of your Social Security benefits depending on your income level. Taxability is determined by your “combined income,” which is your adjusted gross income (AGI) plus any nontaxable interest and one-half of your total Social Security benefits for the year. This figure is then compared against thresholds set by the Internal Revenue Service (IRS).

For single filers, if your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxed. If your income exceeds $34,000, up to 85% of your benefits could be taxed. For those married filing jointly, the 50% taxability threshold applies to combined incomes between $32,000 and $44,000. If joint income is over $44,000, up to 85% of the benefits may be taxed. These income thresholds have not been adjusted for inflation, causing more beneficiaries to be subject to this tax over time.

The amount included in your taxable income is the lesser of the specified percentage (50% or 85%) of your benefits or that same percentage of the amount by which your combined income exceeds the base threshold. You will never pay federal taxes on more than 85% of your total Social Security benefits. Individuals who rely almost exclusively on Social Security are unlikely to meet these income minimums and will not owe federal tax on their benefits.

States That Currently Tax Social Security Benefits

While most states do not tax Social Security, a handful do, each with its own rules. As of 2025, eight states impose a tax on these benefits, though most offer deductions or credits that can reduce or eliminate this liability. These states are Colorado, Connecticut, Minnesota, Montana, New Mexico, Utah, and Vermont. West Virginia is also on this list but is phasing out its tax.

Colorado

Taxpayers aged 65 and older can deduct all of their federally taxed Social Security benefits. For those between 55 and 64, a full deduction is available if AGI is below $75,000 (single) or $95,000 (joint). Taxpayers in this age group with income above these thresholds can claim a $20,000 deduction.

Connecticut

In Connecticut, taxability is tied to adjusted gross income. Single filers with an AGI below $75,000 are exempt, as are joint filers with an AGI below $100,000. For those with incomes above these amounts, 75% of the benefits remain exempt from state taxation regardless of income.

Minnesota

Minnesota provides an income-based exemption. For 2025, joint filers with an AGI under $108,320 and single filers with an AGI under $84,490 are exempt. Taxpayers with incomes exceeding these amounts will have a portion of their benefits subject to state income tax.

Montana

Montana’s taxation of Social Security is aligned with the federal rules. However, the state allows a subtraction of $5,500 per qualifying individual aged 65 and older, which helps to reduce the state tax liability for many retirees.

New Mexico

Most New Mexico residents are now exempt from the tax on Social Security. Single filers with income under $100,000 and married couples filing jointly with income under $150,000 can fully deduct their Social Security payments. Only retirees with incomes above these thresholds will pay state income tax on their benefits.

Utah

Utah’s system is based on federal rules, applying the state’s income tax rate to the federally taxable portion of benefits. However, the state offers a tax credit that offsets this tax for many households. For 2025, some households with income over $90,000 may still be subject to the tax.

Vermont

Vermont provides an income-based exemption. For 2025, single filers with income below $50,000 and married couples with income below $65,000 are fully exempt. The tax then phases in, and benefits are fully taxable for individuals earning over $60,000 and couples over $75,000.

West Virginia

West Virginia is eliminating its tax on Social Security benefits. For the 2025 tax year, residents can subtract 65% of their federally taxable Social Security benefits from their state income. Beginning in 2026, the state will allow a 100% deduction, completely phasing out the tax for all residents.

States That Do Not Tax Social Security Benefits

A large majority of states and the District of Columbia do not impose a state-level tax on Social Security benefits. The reasons for this exemption vary; some states have no personal income tax, while others with an income tax have chosen to exclude Social Security from their tax base.

The states that do not tax Social Security because they do not levy a state income tax on wages are:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Wyoming

New Hampshire taxes interest and dividend income, but this does not extend to Social Security payments.

Beyond the states with no income tax, an additional 34 states and the District of Columbia have an income tax but provide a full exemption for Social Security benefits. Rhode Island joined this group in 2025, making all Social Security benefits fully deductible from state income.