Which states have no tax on pensions or Social Security

Thirty-nine states do not tax Social Security income at all. Thirteen states tax pensions, Social Security, or both, but most of those offer exemptions or deductions that reduce or eliminate the tax for many retirees. The specifics depend on your state, your income level, and whether you receive a pension, Social Security, or both.

The states that tax Social Security are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont. However, most of these states exempt Social Security for people over a certain age or below a certain income threshold. For example, Colorado taxes Social Security only for high-income retirees, while Kansas exempts it entirely for people 55 and older.

Pension taxation is separate from Social Security taxation. Some states tax pensions but not Social Security, or vice versa. A few states—like Illinois and Pennsylvania—exempt most or all pension income from state tax, which can make a significant difference in your retirement income.

Key Takeaways

  • Thirty-nine states do not tax Social Security income, but thirteen states do tax it, though most offer age or income exemptions.
  • Pension taxation rules differ from Social Security rules; some states tax one but not the other, and exemptions vary widely by state.
  • Your actual tax burden depends on your total income, your age, and which state you live in, not just whether the state has a tax.
  • If you are considering moving in retirement, comparing the full tax picture—including property tax, sales tax, and income tax—matters more than Social Security tax alone.

States that do not tax Social Security at all

The following 39 states impose no income tax on Social Security benefits: Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

In these states, your Social Security income is not subject to state income tax, regardless of how much you receive or what other income you have. However, this does not mean you pay no state tax at all—many of these states have sales tax, property tax, or other taxes that may affect your retirement budget.

States that tax Social Security with exemptions or deductions

Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont tax Social Security, but most offer exemptions based on age or income. The threshold and exemption amount vary significantly.

Kansas exempts Social Security entirely for people 55 and older. Connecticut exempts it for people 62 and older. Minnesota taxes Social Security only for high-income households—the threshold is roughly $85,000 for married couples filing jointly. Colorado and Utah also use income thresholds that exempt many retirees. Nebraska and Rhode Island offer partial deductions or exemptions depending on age and income.

To know whether you will owe tax in these states, you need to check the specific rules for your age and income level. A state tax calculator or a call to your state's revenue department can give you a precise answer for your situation.

How pension income is taxed differently from Social Security

Pension taxation is separate from Social Security taxation. Some states that tax Social Security do not tax pensions, and some states that do not tax Social Security do tax pensions.

Illinois and Pennsylvania exempt most or all pension income from state tax. Many other states offer partial exemptions or deductions for pension income, especially for people over a certain age. For example, Mississippi exempts all retirement income, including pensions and Social Security. Louisiana exempts military pensions and some other government pensions.

If you receive a pension from a former employer or the military, check your state's rules on pension taxation separately from Social Security rules. The two are not always the same.

What to consider if you are moving in retirement

Social Security tax is only one part of your state tax picture. Before moving to a state based on Social Security tax alone, consider property tax, sales tax, and income tax on other sources of income like pensions, investments, or part-time work.

Some states with no Social Security tax have high property tax or sales tax. Others have low overall tax burdens but tax pensions heavily. A state that looks good on paper for Social Security may cost you more in total taxes once you factor in everything else.

If you own a home or plan to, property tax rates matter significantly. If you spend heavily on goods and services, sales tax adds up. Use a retirement tax calculator or speak with a tax professional who knows both your current state and the state you are considering.

How to find your state's specific rules

Your state's revenue or taxation department website has the official rules for Social Security and pension taxation. Search for "[your state] Social Security tax" or "[your state] pension tax" to find the relevant page.

If the website is unclear or you have questions about your specific situation, call the department directly. Many state revenue departments have phone lines for taxpayer questions, and they can tell you whether you will owe tax based on your income and age.

You can also work with a tax professional or financial advisor who is familiar with your state's rules. They can help you understand the full tax picture and plan accordingly.

Frequently Asked Questions

Does moving to a no-tax state reduce my federal income tax?

No. Federal income tax applies regardless of which state you live in. Moving to a state with no Social Security tax only reduces your state income tax, not your federal tax. You will still owe federal income tax on your Social Security and other income if your total income exceeds the federal threshold.

If I move to a state that taxes Social Security, do I owe tax on benefits I received before I moved?

No. You only owe tax on income in the year you receive it and in the state where you lived when you received it. If you moved mid-year, you may owe tax to both states for the portion of the year you lived in each, but you do not owe back taxes to a new state for income from previous years.

Are military pensions treated the same as civilian pensions for state tax purposes?

No. Many states offer special exemptions or deductions for military pensions that do not apply to civilian pensions. Some states exempt military pensions entirely. Check your state's rules specifically for military retirement income.

If my spouse and I live in different states, which state taxes apply to our Social Security?

Each person is taxed based on the state where they live. If you and your spouse live in different states, each of you follows the tax rules of your own state. If you file a joint federal return but live in different states, you may need to file separate state returns or follow special rules—contact both states' revenue departments for guidance.

Can I reduce my state income tax by moving my retirement accounts to a no-tax state?

No. Your state tax is based on where you live, not where your money is held. If you move to a state with no Social Security tax, you benefit from that rule regardless of where your bank account or investments are located. If you stay in a state that taxes Social Security, moving your money does not change that.