Social Security Tax by State 2026: Which States Tax Your Social Security Benefits?

Social Security benefits are taxed differently depending on where you live and how much total income you have. While the federal government can tax up to 85% of your Social Security benefits, most states do NOT tax Social Security at all.

As of 2026, only 9 states tax Social Security benefits — down from 13 states in 2023 as several states eliminated the tax to attract retirees. The remaining 41 states either have no income tax or specifically exempt Social Security from state taxation.

A retiree receiving $30,000 in Social Security and $20,000 from retirement accounts pays $0 state tax in Florida, but could pay $1,200+ in Minnesota or Connecticut on the same income. Over 20 years of retirement, this difference exceeds $24,000.

This guide covers federal Social Security taxation rules, which states tax Social Security benefits (and which don't), best states for Social Security recipients, and strategies to minimize taxes on your benefits.

Federal Social Security Tax Rules (How the IRS Taxes Benefits)

The federal government can tax up to 85% of your Social Security benefits depending on your "combined income."

What Is Combined Income?

The IRS calculates "combined income" (also called "provisional income") to determine if your Social Security is taxable:

Combined Income = Adjusted Gross Income (AGI) + Nontaxable Interest + 50% of Social Security Benefits

Example:

• AGI (retirement account withdrawals, pensions, wages): $30,000
• Nontaxable interest (municipal bonds): $2,000
• Social Security benefits: $24,000
• Combined income: $30,000 + $2,000 + ($24,000 × 50%) = $44,000

How Much of Your Social Security Is Taxable (Federal)

Based on combined income:

Example: Single filer with $40,000 combined income

• Exceeds $34,000 threshold
• Up to 85% of Social Security is taxable
• If receiving $24,000 in SS, up to $20,400 (85%) is included in taxable income
• Taxed at ordinary income rates (10-12% federal for most retirees)

Important: "Up to 85%" Explained

The IRS uses a complex formula. "Up to 85%" means:

• If combined income barely exceeds $34,000, only a portion is taxable (not the full 85%)
• As combined income increases, more of your SS becomes taxable, capping at 85%
• Very high earners ($100K+ combined income) typically reach the full 85% taxable

The math is complicated — most retirees use tax software or IRS Publication 915 worksheet to calculate exact taxable amount.

States That Tax Social Security Benefits (2026)

As of 2026, only 9 states tax Social Security benefits. Each state has different rules, exemptions, and income thresholds.

1. Colorado

• Tax on SS: Partial — SS benefits are subtracted from federal taxable income for taxpayers under age 65
• Age 65+: Can subtract up to $24,000 of SS and pension income (2026)
• Who pays: Retirees under 65 with high income, or those over 65 with income exceeding exemption
• Effective rate: 4.4% flat rate on taxable portion

2. Connecticut

• Tax on SS: Partial — exemptions based on income
• Exemption: Full exemption if AGI under $75,000 (single) or $100,000 (joint)
• Who pays: Only high-income retirees
• Effective rate: 3-6.99% on taxable portion (graduated)

3. Minnesota

• Tax on SS: Partial — follows federal taxation but allows subtraction
• Exemption: Can subtract SS if income below $82,190 (single) or $105,380 (joint) in 2026
• Who pays: High-income retirees exceeding thresholds
• Effective rate: 5.35-9.85% on taxable portion

4. Montana

• Tax on SS: Partial — follows federal taxation but allows deduction
• Exemption: Can deduct up to $5,440 (2026) of taxable SS
• Who pays: Most retirees with SS exceeding exemption
• Effective rate: 5.9% flat rate on taxable portion

5. New Mexico

• Tax on SS: Partial — exemptions based on age and income
• Exemption: Full exemption if income under $100,000 (single) or $150,000 (joint) AND age 65+
• Who pays: High-income retirees or those under 65
• Effective rate: 1.7-5.9% on taxable portion

6. Rhode Island

• Tax on SS: Partial — full exemption for most retirees
• Exemption: Full exemption if reaching full retirement age (67 for those born 1960+)
• Who pays: Early retirees (under full retirement age) with high income
• Effective rate: 3.75-5.99% on taxable portion

7. Utah

• Tax on SS: Partial — tax credit offsets tax for many retirees
• Credit: Nonrefundable credit based on income (phases out above certain thresholds)
• Who pays: Higher-income retirees exceeding credit phaseout
• Effective rate: 4.5% flat rate (but credit reduces effective rate for most)

8. Vermont

• Tax on SS: Partial — exemptions based on income
• Exemption: Full exemption if AGI under $50,000 (single) or $65,000 (joint), partial exemption up to $60,000/$75,000
• Who pays: Higher-income retirees
• Effective rate: 3.35-8.75% on taxable portion

9. West Virginia

• Tax on SS: Phasing out — 35% taxable in 2026, decreasing to 0% by 2026 (full exemption by 2026)
• 2026 status: Last year of partial taxation
• Who pays: All SS recipients (35% of federal taxable amount in 2026)
• Effective rate: 2.36-5.12% on taxable portion (35% of SS included)
• Note: Fully exempt starting 2027

States That Recently Eliminated Social Security Tax

• Missouri: Eliminated 2024
• Kansas: Eliminated 2024
• Nebraska: Eliminated 2025
• Iowa: Phasing out 2023-2026 (fully eliminated by 2026)

States with No Tax on Social Security (41 States)

The vast majority of states do NOT tax Social Security benefits. These 41 states either have no income tax or specifically exempt Social Security from state taxation.

States with No Income Tax (9 States)

These states have no income tax at all, so Social Security is automatically exempt:

1. Alaska
2. Florida — most popular state for retirees
3. Nevada
4. New Hampshire — 0% on wages/SS (5% on dividends/interest only)
5. South Dakota
6. Tennessee
7. Texas — second most popular for retirees
8. Washington
9. Wyoming

States with Income Tax BUT Exempt Social Security (32 States)

These states have income tax but specifically exempt Social Security benefits from taxation:

• Alabama
• Arizona
• Arkansas
• California
• Delaware
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa (as of 2026)
• Kansas (as of 2024)
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Mississippi
• Missouri (as of 2024)
• Nebraska (as of 2025)
• New Jersey
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• South Carolina
• Virginia
• Wisconsin
• District of Columbia

Note: Even high-tax states like California (13.3%), New York (10.9%), and New Jersey (10.75%) do NOT tax Social Security benefits.

Best States for Social Security Recipients (2026 Rankings)

Top 10 Best States for Retirees on Social Security

Ranked by: no tax on Social Security + overall tax burden + cost of living + retiree amenities

1. Florida

• SS tax: $0 (no income tax)
• Overall tax burden: Low (no estate tax, low property tax in many counties)
• Why #1: Warm weather, large retiree community, no state tax on any retirement income, homestead exemption saves property taxes
• Popular cities: Tampa, Sarasota, Naples, The Villages
• Cons: Hurricane risk, high homeowners insurance

2. Texas

• SS tax: $0 (no income tax)
• Overall tax burden: Moderate (no income/estate tax, but 2.18% avg property tax)
• Why it ranks: Low cost of living (outside Austin), large retiree communities, diverse climates
• Popular cities: San Antonio, Austin, Dallas, Houston suburbs
• Cons: High property taxes, extreme heat

3. Nevada

• SS tax: $0 (no income tax)
• Overall tax burden: Low (no income/estate tax)
• Why it ranks: Proximity to California without CA taxes, dry climate, growing retiree communities
• Popular cities: Las Vegas, Henderson, Reno
• Cons: Extreme heat, limited healthcare outside Vegas/Reno

4. Arizona

• SS tax: $0 (fully exempt)
• Overall tax burden: Low (2.5% flat income tax on other income)
• Why it ranks: Warm winters, massive retiree communities, low taxes on pensions/retirement accounts too
• Popular cities: Phoenix, Scottsdale, Tucson, Sedona
• Cons: Extreme summer heat (110°F+)

5. South Carolina

• SS tax: $0 (fully exempt)
• Overall tax burden: Low-moderate (5% top rate on other income, but lower for retirees 65+)
• Why it ranks: Age 65+ deduction ($15,000), mild winters, affordable coastal living
• Popular cities: Myrtle Beach, Charleston, Greenville, Hilton Head
• Cons: Hurricane risk on coast

6. Alabama

• SS tax: $0 (fully exempt)
• Overall tax burden: Low (2-5% income tax, pension exclusion for 65+)
• Why it ranks: Very low cost of living, low property taxes (0.41% avg), Gulf Coast beaches
• Popular cities: Birmingham, Huntsville, Mobile, Gulf Shores
• Cons: Limited urban amenities

7. Tennessee

• SS tax: $0 (no income tax)
• Overall tax burden: Low (no income tax, but 9.5% avg sales tax)
• Why it ranks: Nashville/Memphis culture, low cost of living, mild winters
• Popular cities: Nashville, Knoxville, Chattanooga
• Cons: High sales tax

8. Wyoming

• SS tax: $0 (no income tax)
• Overall tax burden: Very low (no income/estate tax, low property tax)
• Why it ranks: Beautiful scenery, outdoor lifestyle, very low taxes
• Popular cities: Jackson, Cheyenne, Casper
• Cons: Harsh winters, remote, limited healthcare

9. Georgia

• SS tax: $0 (fully exempt)
• Overall tax burden: Moderate (4.99% flat tax, but age 65+ retirement exclusion up to $65,000)
• Why it ranks: Atlanta metro amenities, mild winters, age 65+ get $65K retirement income exclusion
• Popular cities: Atlanta suburbs, Savannah, Athens
• Cons: Humid summers

10. Mississippi

• SS tax: $0 (fully exempt)
• Overall tax burden: Low (4-5% income tax, very low cost of living)
• Why it ranks: Lowest cost of living in US, Gulf Coast beaches, low property taxes
• Popular cities: Biloxi, Gulfport, Jackson
• Cons: Limited healthcare, lower quality of life metrics

Worst States for Social Security Recipients

1. Vermont: Taxes SS + high income tax (8.75%) + high property tax
2. Minnesota: Taxes SS for high earners + 9.85% top income tax rate
3. Connecticut: Taxes SS for high earners + 6.99% income tax + high cost of living
4. Rhode Island: Taxes SS for early retirees + 5.99% income tax + high cost of living

FICA Tax: Social Security Tax for Workers (Not Retirees)

Workers (not retirees receiving benefits) pay FICA tax (Federal Insurance Contributions Act) on wages, which funds Social Security and Medicare.

FICA Tax Breakdown (2026)

• Social Security tax: 6.2% on wages up to $184,500 (employee) + 6.2% (employer) = 12.4% total
• Medicare tax: 1.45% on all wages (employee) + 1.45% (employer) = 2.9% total
• Additional Medicare Tax: 0.9% on wages over $200,000 (single) or $250,000 (married) — employee only, no employer match

Total FICA: 7.65% employee + 7.65% employer = 15.3% combined

FICA Tax Cap (Wage Base Limit)

Social Security tax applies only to the first $184,500 of wages in 2026. Income above $184,500 is NOT subject to Social Security tax (but still subject to Medicare tax).

Example: Employee earning $200,000

• Social Security tax: $184,500 × 6.2% = $10,453.20
• Medicare tax: $200,000 × 1.45% = $2,900
• Additional Medicare tax: ($200,000 - $200,000) × 0.9% = $0 (right at threshold)
• Total employee FICA: $13,353.20

Self-Employed FICA (Self-Employment Tax)

Self-employed individuals pay both the employee and employer portions:

• Self-employment tax: 15.3% on net self-employment income (12.4% SS + 2.9% Medicare)
• Deduction: Can deduct 50% of SE tax from income
• Cap: Social Security portion capped at $184,500 net profit

State-Level FICA? (No)

FICA is a federal tax only. No state charges FICA or additional Social Security tax on wages. States only tax income (wages, pensions, etc.) via state income tax, which is separate from FICA.

Strategies to Minimize Taxes on Social Security Benefits

Strategy 1: Move to a State That Doesn't Tax Social Security

If you live in one of the 9 states that tax Social Security, consider relocating to one of the 41 states that don't. A retiree with $30K in SS and $20K in other income could save $500-$2,000/year in state taxes.

Best states to move to: Florida, Texas, Nevada, Arizona, South Carolina, Tennessee, Georgia

Strategy 2: Delay Social Security Until Age 70

Benefits increase 8% per year from Full Retirement Age (67) to age 70. Delaying:

• Increases monthly benefit by 24% (3 years × 8%)
• May allow you to draw down retirement accounts first (potentially at lower tax brackets)
• Larger benefit at 70 means less need to withdraw from taxable accounts later

Tax advantage: If you withdraw from retirement accounts at age 67-69 (before taking SS), you may stay under the $32K/$44K thresholds and avoid federal SS taxation later.

Strategy 3: Manage Combined Income to Stay Under Thresholds

If your combined income is close to $25K (single) or $32K (joint), consider:

• Roth conversions before taking SS: Convert traditional IRA to Roth while working (pay tax now), so Roth withdrawals in retirement don't count toward combined income
• Withdraw from Roth accounts first: Roth IRA/401(k) withdrawals don't count toward combined income
• Delay retirement account withdrawals: If you can live on savings/Roth, delay traditional IRA/401(k) withdrawals until RMDs required at 73

Strategy 4: Use Qualified Charitable Distributions (QCD)

At age 70½+, you can donate up to $105,000/year (2026) from IRA directly to charity. QCD:

• Counts toward Required Minimum Distribution (RMD)
• Does NOT count as income (doesn't increase combined income for SS taxation)
• Reduces AGI, potentially avoiding SS taxation

Example: Your RMD is $20K. Instead of withdrawing $20K (increasing combined income), donate $20K via QCD to charity. Your AGI stays lower, potentially avoiding SS taxation.

Strategy 5: Coordinate State Residency with SS Start Date

If moving from a state that taxes SS to one that doesn't, time your move:

• Establish residency (driver's license, voter registration, domicile) in new state BEFORE starting SS benefits
• File part-year returns showing you received SS while a resident of the non-taxing state

Strategy 6: File Separately (In Rare Cases)

Married couples filing separately face a $0 threshold (any combined income makes SS taxable). However, in rare cases where one spouse has very low income and the other has high income, filing separately may reduce overall tax if it allows one spouse to avoid SS taxation. Consult a CPA — this rarely works.

Common Social Security Tax Questions & Mistakes

Mistake 1: Assuming Social Security Is Always Tax-Free

Problem: You retire and are shocked when your tax software shows Social Security is taxable.

Reality: Up to 85% of federal SS benefits are taxable if combined income exceeds $34K (single) or $44K (joint).

Fix: Plan for taxes on SS. If you have other income (pension, retirement accounts), assume 85% of SS is taxable.

Mistake 2: Not Withholding Taxes from Social Security

Problem: You don't withhold taxes from SS payments and owe $3,000+ at tax time.

Reality: Social Security does NOT automatically withhold taxes. You must request withholding via Form W-4V.

Fix: Request 7%, 10%, 12%, or 22% federal withholding on SS benefits. Most retirees choose 10-12%.

Mistake 3: Taking Early Retirement Account Withdrawals and Making SS Taxable

Problem: You're 67, start taking SS, and also withdraw $30K from IRA. Combined income = $47K, making 85% of SS taxable.

Reality: IRA withdrawals count toward combined income, triggering SS taxation.

Fix: Withdraw from Roth accounts (don't count toward combined income) or delay SS to age 70 while drawing down traditional accounts first.

Mistake 4: Forgetting About State Taxation

Problem: You live in Minnesota and assume your SS is tax-free like most retirees.

Reality: 9 states still tax SS benefits for some or all retirees.

Fix: Check your state's rules. If your state taxes SS and you're considering moving anyway, relocate to a non-taxing state.

Mistake 5: Not Coordinating SS with Spouse

Problem: Both spouses start SS at 62, maximizing early income but minimizing lifetime benefits and increasing taxes.

Reality: Lower-earning spouse starting early may make sense, but higher-earning spouse should delay to 70 for maximum survivor benefit and tax efficiency.

Fix: Coordinate timing. Often optimal: lower earner at 62-67, higher earner at 70.