41 States Where Retirees Pay Zero Taxes on Benefits, Social Security 2025

For millions of older Americans, Social Security is the backbone of retirement income. Roughly 4 in 10 people over 65 depend on it for at least half of their monthly income, according to AARP. For many, it is the only steady stream of money after leaving the workforce.

But while the federal government already taxes up to 85% of Social Security income depending on total earnings, some states pile on with their own income taxes—shrinking the monthly amount retirees actually take home.

The good news? In 2025, 41 states and Washington, D.C. will not tax Social Security benefits at all. That leaves just nine states still imposing some level of taxation, although many offer partial exemptions.

The 9 States Still Taxing Social Security in 2025

Despite the nationwide trend away from taxing retirees, the following nine states continue to levy some form of tax on Social Security checks in 2025:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

Each state sets its own rules, meaning the actual impact varies. Some seniors pay no tax at all due to income thresholds or age-based exemptions, while others face partial taxation.

Examples of State-Specific Rules

• Colorado: Starting in 2025, retirees aged 55 to 64 earning less than \$75,000 (single) or \$95,000 (married) will no longer pay tax on Social Security. Residents 65 and older already enjoy full exemptions.
• West Virginia: The state is phasing out taxation altogether. In 2025, only 35% of benefits will be taxed. By 2026, Social Security income will be completely tax-free.
• Connecticut, Rhode Island, Vermont: These states allow exemptions if income is below certain thresholds, protecting lower- and middle-income retirees.

For retirees in these nine states, careful planning is essential, as taxes can reduce already limited benefits.

The 41 States and D.C. That Do Not Tax Social Security

The vast majority of the U.S. will not tax Social Security income in 2025. Retirees in these 41 states and Washington, D.C. can count on keeping their full federal benefit without state-level deductions:

Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, Wyoming, and Washington, D.C.

For retirees considering relocation, these tax-free states often stand out as more affordable retirement destinations.

Big Changes in 2024 That Carried Into 2025

The list of states not taxing Social Security expanded dramatically in the past two years.

• Missouri and Nebraska: Both ended taxation of Social Security starting in 2024.
• Kansas: Passed legislation in mid-2024 to eliminate taxation effective 2025.

These changes reduced the number of states taxing Social Security from 12 down to just 9—a major win for retirees.

How Much Do Retirees Actually Save?

The savings from avoiding state taxes depend on two factors: the state’s income tax rate and the size of the retiree’s Social Security benefits.

Example Calculation

• Annual Social Security benefit: \$30,000
• State tax rate: 5%
• Potential savings: \$1,500 per year simply by living in a tax-free state.

Real-World Statewide Savings

• Missouri: The state’s policy change is projected to save retirees about \$309 million annually.
• Nebraska: Retirees will collectively save around \$17 million per year.

For individuals, these savings may be the difference between affording rising healthcare costs or stretching groceries until the end of the month.

Why It Matters for Retirees

As inflation continues to drive up the price of essentials—from groceries to prescription drugs—keeping more of each Social Security check is vital.

Key considerations include:

• Budget Relief: No state taxes means retirees keep more of their fixed income.
• Retirement Planning: Choosing a state with tax-free benefits could improve financial security over decades.
• Migration Trends: States without Social Security taxes are often more attractive for retirees considering relocation.

Even a few hundred dollars saved each year adds up, particularly for the millions of seniors who depend on these checks as their main source of income.

Federal vs. State: Understanding the Difference

It’s important to note that federal taxation still applies regardless of where you live. The IRS can tax up to 85% of Social Security benefits based on your combined income.

• Single filers with combined income between \$25,000 and \$34,000 pay tax on up to 50% of benefits. Above \$34,000, up to 85% is taxable.
• Married couples filing jointly with income between \$32,000 and \$44,000 may pay tax on up to 50% of benefits. Above \$44,000, up to 85% is taxable.

What state rules determine is whether you’ll also face an additional layer of taxation on top of the federal rules.

Seniors’ Growing Concerns

Despite the good news about shrinking state-level taxation, many seniors remain frustrated. Surveys show that 63% of retirees feel Social Security doesn’t keep pace with their living costs, even with annual COLA increases.

While eliminating state taxes helps, the larger issues remain:

• Rising healthcare costs consuming bigger shares of retirement budgets.
• Housing inflation, particularly property taxes and rent.
• Trust fund uncertainty, with Social Security’s reserves projected to face depletion by the early 2030s without reform.

In this context, state tax relief is helpful but not a complete solution.

The Bottom Line

In 2025, 41 states and Washington, D.C. will not tax Social Security benefits, offering millions of retirees critical financial relief. Only nine states still impose some level of taxation, though many have exemptions and phase-outs underway.

For seniors planning retirement or relocation, knowing which states tax benefits is crucial. In a time of rising expenses, even modest tax savings can significantly improve financial security.

5 FAQs

Q1. Which states will still tax Social Security in 2025?
Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.

Q2. Which states do not tax Social Security in 2025?
41 states and Washington, D.C. will not tax benefits, including Florida, Texas, California, and New York.

Q3. How much can retirees save by avoiding state Social Security taxes?
Savings depend on state income tax rates but can be worth hundreds or even thousands of dollars annually.

Q4. Are federal taxes on Social Security still required?
Yes. The IRS can tax up to 85% of Social Security benefits depending on income.

Q5. What major changes occurred in 2024 affecting 2025 taxation?
Missouri, Nebraska, and Kansas ended Social Security taxation, reducing the total number of taxing states from 12 to 9.