Thirteen states currently do not tax Social Security income at all

If you receive Social Security and live in Alaska, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, or Wyoming, your state will not take a portion of those payments. This means the full amount you receive from Social Security stays in your pocket rather than being reduced by state income tax.

The reason these states have this rule varies. Some have no state income tax at all (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming). Others tax income from wages and investments but specifically exempted Social Security payments through state law (Illinois, Iowa, Louisiana, Mississippi, Missouri, New Hampshire, Pennsylvania). The distinction matters because it affects whether you owe state taxes on other income you receive.

If you live in a state that does tax Social Security, the amount withheld depends on your total income for the year, your filing status, and your state's tax brackets. Some states tax it the same way they tax wages; others apply different rules. A few states tax it only if your income exceeds a certain threshold.

Key Takeaways

  • Fifteen states do not tax Social Security income: Alaska, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming.
  • Five of these states (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming) have no state income tax on any income; the other ten specifically exempted Social Security through state law.
  • If you live in a state that does tax Social Security, you will owe state tax on those payments only if your total income exceeds your state's threshold, which varies by state and filing status.
  • Moving to a no-tax state after you start receiving Social Security does not change your federal tax obligation, but it does eliminate your state tax burden on those payments.

How state taxation of Social Security actually works

Social Security income is always subject to federal income tax if your combined income exceeds certain thresholds. Combined income means your adjusted gross income plus nontaxable interest plus half your Social Security benefits. If you are single and your combined income is over $25,000, or married filing jointly and over $32,000, you may owe federal tax on up to 85 percent of your benefits.

State taxation works separately. In states that tax Social Security, the state looks at your total income for the year and applies its own tax brackets and rules. Some states treat Social Security the same as wages. Others allow a deduction or exemption for people over a certain age. A few states only tax Social Security if your income from other sources (wages, pensions, investments) exceeds a specific amount.

The practical effect: if you live in a state that taxes Social Security and your combined income is $35,000, you might owe both federal tax and state tax on a portion of your benefits. If you live in one of the fifteen no-tax states, you owe only the federal tax. The federal obligation does not change based on where you live.

States with no income tax on Social Security and no state income tax

Eight states have no state income tax at all, which means Social Security is not taxed there. These are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. In these states, you owe no state tax on Social Security, wages, pensions, or investment income.

However, "no state income tax" does not mean no state taxes. These states typically fund government through sales tax, property tax, and other fees. Your overall tax burden depends on how much you spend and own property, not just on your income. Some of these states have higher sales tax rates to compensate for the lack of income tax.

States that tax other income but not Social Security

Seven states have state income tax but specifically do not tax Social Security payments. These are Illinois, Iowa, Louisiana, Mississippi, Missouri, New Hampshire, and Pennsylvania. In these states, you may owe state tax on wages, pensions, and investment income, but not on Social Security.

The rules for what counts as taxable income in these states vary. For example, Illinois taxes wages and business income but not pensions or Social Security. Pennsylvania taxes wages and some types of income but exempts pensions and Social Security. Iowa taxes wages and other income but allows a deduction for Social Security. Check your specific state's rules if you receive multiple types of income, because you may owe state tax on some of it even though Social Security is protected.

What to do if you live in a state that taxes Social Security

If your state taxes Social Security, you will need to report your benefits on your state tax return. The amount you owe depends on your total income, your filing status, and your state's tax brackets. Some states provide worksheets or online calculators to help you figure this out.

You have three main options: pay the tax when you file your state return, have taxes withheld from your Social Security payments, or make quarterly estimated tax payments. To have taxes withheld, you file Form W-4V with Social Security. This tells them to hold back a percentage of each payment. The percentage you choose (7, 10, 12, or 22 percent) applies to both federal and state withholding combined, so you will need to decide how much total withholding you want.

If you do not withhold taxes and do not pay them when you file, you may owe penalties and interest. The safest approach is to either withhold enough to cover both federal and state tax, or to set aside money each month and pay estimated taxes quarterly.

Moving to a no-tax state after you start receiving Social Security

If you move from a state that taxes Social Security to one that does not, your state tax obligation changes immediately based on your new state of residence. You do not need to do anything special with Social Security itself; the change is handled through your state tax return.

Your federal tax obligation does not change. You will still owe federal tax on Social Security if your combined income exceeds the federal thresholds, regardless of which state you live in. When you move, update your address with Social Security so they have your current state on file, but this is for their records only and does not affect your benefits or federal tax.

If you moved partway through the year, you may need to file a part-year resident return in your old state and a part-year resident return in your new state. Each state will tax your income only for the months you lived there. This can be complicated, so consider consulting a tax preparer if you moved during a tax year.

How to find out your state's specific Social Security tax rules

The easiest way to learn your state's rules is to visit your state's department of revenue website and search for "Social Security" or "retirement income." Most states have a page explaining which types of retirement income are taxed and which are not. You can also call your state's tax assistance line and ask directly.

If you use tax preparation software or work with a tax preparer, they will ask about your Social Security income and apply your state's rules automatically. If you prepare your own return, your state's tax form or instructions will tell you whether to report Social Security and how to calculate the taxable amount.

Keep in mind that state tax laws change. A state that currently taxes Social Security might change its law in the future, or vice versa. Check your state's rules each year before you file, rather than assuming the rules are the same as last year.

Frequently Asked Questions

If I move to a no-tax state, do I get a refund for state taxes I already paid on Social Security?

No. Your state tax obligation is based on where you lived when you earned the income. If you lived in a state that taxes Social Security and received payments there, you owe that state's tax for that period. Moving does not change your past tax liability. However, your new state will not tax Social Security you receive after you move there.

Does living in a no-tax state reduce my federal Social Security tax?

No. Federal tax on Social Security is the same regardless of which state you live in. The federal thresholds ($25,000 for single filers, $32,000 for married filing jointly) apply everywhere. Moving to Alaska or Florida does not change your federal tax on benefits.

If I work part-time and receive Social Security, do I owe state tax on both?

In a state that taxes Social Security, yes—you owe state tax on both your wages and your Social Security if your total income exceeds your state's threshold. In a no-tax state, you owe state tax on your wages but not on Social Security. Your state's tax form will ask for both types of income.

Can I avoid state tax on Social Security by claiming residency in a no-tax state?

No. Your state of residence for tax purposes is where you actually live—where you have a home, spend most of your time, and have ties like a driver's license and voter registration. You cannot claim residency in a state you do not live in just to avoid taxes. If you do, the state you actually live in can audit you and demand back taxes plus penalties.

What if I receive Social Security from one state and live in another?

It does not matter where your Social Security payments come from. Your state tax obligation is based on where you live, not where the payments originate. If you live in Pennsylvania (which does not tax Social Security), you owe no state tax on those payments even if you worked and paid into the system in a different state.