Taxes

By the Retiree Report Editorial Team · Updated 2026-06-25 · 7 min read

This article is general information, not financial, tax, or legal advice. Consult a licensed professional before acting on it.

States that don’t tax Social Security in 2026, and the 8 that still do

Here’s the short answer: in 2026, 41 states plus the District of Columbia leave your Social Security benefits alone at the state level. Only eight still tax them — Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont — and even in those eight, income limits shield most retirees from owing anything. West Virginia, which used to be on the list, finished phasing out its tax this year.

Which states still tax Social Security in 2026?

If you want the list memorized for your next move or your next conversation with a tax preparer, it’s these eight: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Every other state either has no income tax at all (think Florida, Texas, Tennessee, Nevada) or has an income tax but specifically exempts Social Security (think California, New York, New Jersey, Pennsylvania).

Being on the “still taxes it” list is not the same as actually owing tax. Each of the eight uses income thresholds, age rules, or a phase-out so that lower- and middle-income retirees keep all of their benefits. According to Kiplinger, the practical effect in several of these states is that the large majority of beneficiaries pay nothing — the tax bites mainly at higher incomes.

So the real question isn’t just “does my state tax Social Security?” It’s “does my state tax my Social Security, at my income?” Those are different questions, and the gap between them is where a lot of retirees get needlessly worried.

What changed for 2026

The headline change is West Virginia. The state passed House Bill 4880 in 2024 and ran a three-year phase-out, reducing the share of benefits subject to state tax by 35% for tax year 2024, 65% for 2025, and 100% starting in 2026. As the West Virginia Tax Division describes it, residents now get a “100% decreasing modification” — plain English for a full exemption.

One timing note worth holding onto. The 100% exemption applies to the 2026 tax year, which means you won’t see the complete benefit until you file that return in early 2027. AARP confirms the schedule and adds that the new law covers all Social Security recipients regardless of income, replacing an older 2019 rule that only helped people under certain income caps.

West Virginia is part of a longer trend. Missouri, Nebraska, and Kansas all dropped their state taxes on Social Security in recent years, and the count of taxing states has steadily fallen from a dozen-plus a decade ago to eight today.

How the eight taxing states actually work

The eight states don’t tax benefits the same way, and the differences matter. Some, like Colorado, tie the break to your age. Others set a flat income ceiling above which part of your benefit becomes taxable. A few mostly mirror the federal formula. Here’s the lay of the land, using the most recent published figures (several of these dollar limits adjust each year, so confirm yours with the state before you file).

Colorado is the friendliest of the group for older retirees. Per the Colorado Department of Revenue, anyone 65 or older can subtract the full amount of Social Security benefits included in their federal taxable income — no income cap at all. For ages 55 to 64, the full subtraction applies when AGI stays under $75,000 (single) or $95,000 (joint); above that, the deduction is capped at $20,000.

Notice how generous several of these thresholds are. New Mexico exempts benefits below $100,000 for a single filer, which is well above what most retirees collect. That’s why state officials there estimate the overwhelming majority of seniors owe nothing on their benefits even though New Mexico technically “taxes Social Security.”

Don’t forget the federal tax on benefits

Moving to a no-tax state solves only half the equation.

Uncle Sam can still tax your benefits, and the federal rules apply in all 50 states.

The federal system uses “combined income” — your adjusted gross income, plus any tax-exempt interest, plus half of your Social Security benefits. According to the Internal Revenue Service, benefits start to become taxable once combined income passes $25,000 for single filers or $32,000 for married couples filing jointly. Cross those base amounts and up to 50% of your benefit can be taxed; go higher (above $34,000 single or $44,000 joint) and up to 85% can be.

Those federal thresholds haven’t been adjusted for inflation since 1994, so more retirees drift into them every year as benefits and other income rise. A temporary federal deduction for people 65 and older is in effect for tax years 2025 through 2028, which can lower taxable income for some seniors — but it doesn’t change the underlying combined-income thresholds, and it’s set to expire. Managing the rest of your taxable income, including the timing of withdrawals and conversions, is one of the few levers you control here. (Our look at the Roth conversion window after retirement walks through how that timing plays out.)

What to do if you live in a taxing state

Start by finding your combined income on last year’s return, then check it against your state’s threshold in the table above. If you’re comfortably under the line — and most retirees are — you can stop worrying. If you’re near or over it, the amount at stake is usually a slice of your benefit taxed at your state rate, not the whole check, so run the actual numbers before assuming the worst.

A few practical moves help. You can ask the Social Security Administration to withhold federal tax from your monthly benefit using Form W-4V, which spares you a surprise bill in April. If your income swings year to year, the IRS withholding estimator and your state’s tax website can tell you whether you’ll owe. And if you’re weighing a relocation, remember that state tax on benefits is one line in a much bigger budget that includes property taxes, home prices, and health costs — the tax implications of downsizing your home after 65 cover the parts of that math people most often overlook. None of this replaces advice from a tax professional who can see your full return, especially in a phase-out state where a few thousand dollars of extra income changes the result.

What to remember

Forty-one states and DC don’t tax Social Security in 2026, and West Virginia just joined them after a three-year phase-out that reached 100% this year. Only eight states still tax benefits, and each one protects lower- and middle-income retirees through income limits or age rules, so living in a “taxing” state often means owing nothing. Whatever your state does, the federal combined-income thresholds of $25,000 (single) and $32,000 (joint) still apply everywhere — and because they aren’t indexed to inflation, they reach more people each year.