Thirteen states do not tax Social Security benefits at all

If you receive Social Security and live in Alabama, Alaska, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Nevada, Pennsylvania, or Tennessee, your state will not tax those benefits. This is the clearest tax advantage available to Social Security recipients — your monthly payment stays intact without state income tax withheld.

The other 37 states and Washington, D.C. do tax Social Security to some degree, though most have income thresholds or formulas that protect lower-income retirees. The amount of tax you owe depends on your total income, your filing status, and sometimes on whether you have other sources of retirement income.

Your federal tax situation is separate. Even if you live in a no-tax state, you may still owe federal income tax on Social Security if your combined income exceeds certain thresholds. The IRS uses a formula based on your "combined income" — which includes half your Social Security benefits plus all other income — to determine how much of your benefit is taxable at the federal level.

Key Takeaways

  • Thirteen states impose no state income tax on Social Security benefits: Alabama, Alaska, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Nevada, Pennsylvania, and Tennessee.
  • The remaining 37 states tax Social Security under different rules — some only tax it if your total income is high, others tax it like ordinary income.
  • Living in a no-tax state saves you money only on state taxes; federal tax on Social Security is determined by the IRS regardless of where you live.
  • If you are considering a move in retirement, state Social Security tax treatment is one factor to weigh alongside cost of living, property taxes, and sales taxes.

How the thirteen no-tax states handle Social Security

These thirteen states have written their tax code to exclude Social Security benefits from taxable income entirely. When you file your state tax return in any of these states, you do not report your Social Security income at all. This applies whether you receive benefits as a retiree, as a surviving spouse or child, or as a disabled worker.

The practical effect is straightforward: if Social Security is your only income, you owe no state income tax in these states. If you have other income — from a pension, part-time work, investment earnings, or retirement account withdrawals — you pay state tax only on that other income, not on the Social Security portion.

This does not mean these states have no income tax. Alaska, Florida, Nevada, Tennessee, and Texas have no state income tax at all. The other eight states do tax wages, pensions, and other income; they simply carved out an exception for Social Security.

How other states tax Social Security

The 37 states that do tax Social Security use different methods. Some states tax it only if your income exceeds a threshold. Others tax it like any other income. A few use a formula similar to the federal rule, based on your combined income.

Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont tax Social Security only if your total income exceeds a state-specific threshold. Once you cross that threshold, the amount of Social Security that becomes taxable varies by state. In some, only the amount above the threshold is taxed; in others, a percentage of your benefits becomes taxable.

Arkansas, Delaware, Maine, and West Virginia tax Social Security under a formula tied to your federal tax situation. If you owe federal tax on your Social Security, you may owe state tax as well, though the state amount is often lower than the federal amount.

The remaining states — California, Hawaii, Idaho, Illinois (on certain retirement income), Indiana (on certain retirement income), Iowa (on certain retirement income), Kentucky (on certain retirement income), Louisiana (on certain retirement income), Massachusetts, Michigan, Mississippi (on certain retirement income), Missouri (on certain retirement income), Montana (on certain retirement income), Nebraska (on certain retirement income), Nevada, New Hampshire, New Jersey, New Mexico (on certain retirement income), New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah (on certain retirement income), Vermont (on certain retirement income), Virginia, Washington, West Virginia (on certain retirement income), Wisconsin, Wyoming — either have no income tax, tax Social Security under their standard income tax rules, or have specific exemptions for retirees.

The rules change periodically, and some states have phased in or phased out Social Security taxation over time. Your state tax department's website will have the current rules for your state.

Federal tax on Social Security is the same everywhere

The IRS taxes Social Security benefits using a formula based on your combined income. Combined income is calculated as your adjusted gross income plus nontaxable interest plus half of your Social Security benefits.

If you are single and your combined income is below $25,000, none of your Social Security is taxable. Between $25,000 and $34,000, up to 50 percent of your benefits may be taxable. Above $34,000, up to 85 percent of your benefits may be taxable. The exact amount depends on how far above the threshold you go.

If you are married filing jointly, the thresholds are $32,000 and $44,000. If you are married filing separately, the rules are much stricter and almost always result in taxation of your benefits.

These thresholds have not changed since 1984, so more retirees fall into the taxable range each year as their income grows or as inflation pushes them higher.

What counts as income for tax purposes

When calculating whether you owe tax on Social Security, both state and federal tax systems count income broadly. Wages, self-employment income, interest, dividends, capital gains, rental income, and distributions from retirement accounts (401(k), IRA, pension) all count.

Some income does not count. Supplemental Security Income (SSI), Medicaid, food assistance, and housing assistance do not count toward the income thresholds. Tax-exempt interest from municipal bonds counts for the federal calculation but not for some state calculations.

If you are still working while receiving Social Security, your wages count in full. There is no separate calculation for earned income — it all goes into the combined income total.

Planning around Social Security taxation

If you are approaching retirement or recently retired, understanding your state's Social Security tax rules can help you plan. Moving to a no-tax state saves money only if the overall tax burden — including property tax, sales tax, and income tax on other sources — is lower than where you currently live.

Some retirees manage their income to stay below the federal taxation threshold by timing retirement account withdrawals, delaying Social Security, or using tax-loss harvesting on investments. These strategies work regardless of where you live, but they are more valuable if you also live in a state that taxes Social Security.

If you have a pension, 401(k), or IRA, the order in which you withdraw from these accounts can affect how much of your Social Security becomes taxable. A tax professional can model different withdrawal strategies for your specific situation.

Frequently Asked Questions

If I move to a no-tax state, will my past Social Security taxes be refunded?

No. State taxes you paid in previous years are not refunded when you move. Only Social Security benefits you receive after you move to the new state are exempt from that state's tax. If you move mid-year, you may owe tax to your old state for the portion of the year you lived there.

Does living in a no-tax state mean I pay no federal tax on Social Security?

No. Federal tax on Social Security is determined by the IRS using your combined income, regardless of which state you live in. A no-tax state exempts you only from state income tax on those benefits.

What if I receive both Social Security and a pension?

Both count toward your income total for tax purposes. In states that tax Social Security, having a pension can push you over the threshold and make your benefits taxable. The order in which you withdraw from your pension and when you claim Social Security can affect your total tax bill.

Can I reduce my Social Security tax by donating to charity?

Charitable donations reduce your overall taxable income, which can indirectly reduce how much of your Social Security becomes taxable. This works only if your combined income is close to the taxation threshold. A tax professional can calculate whether charitable giving makes sense for your situation.

Do I need to file a state tax return if I live in a no-tax state and only receive Social Security?

No. If Social Security is your only income and you live in one of the thirteen no-tax states, you have no state income tax filing requirement. If you have other income, you may need to file even in a no-tax state, depending on the amount.