Social Security benefits play an important role as a source of income for many American retirees. As of December 2024, more than 51 million US citizens had received benefits as retired workers. In many cases, these payments represent a significant portion or even all of the income during retirement.
However, it is important to note that Social Security benefits are still classified as income and may be taxed. If you are currently receiving or receiving Social Security retirement benefits, it is important to understand how you are taxed at both the state level and at the US government.
State not taxed on social security benefits
First, positive news. Most of the states do not impose taxes on social security benefits. This is a list of 41 states, including Washington, DC, which is not taxed on Social Security benefits.
- Alabama
- Alaska
- Arizona
- Arkansaud
- California
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- main
- 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
This extensive list includes several states that recently eliminated taxes on social security benefits, such as Missouri, Nebraska and Kansas, which eliminated these taxes in 2024.
Social Security Benefit Tax states tax benefits
Many states do not tax Social Security, but there are still nine states where these benefits are taxed.
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Yuta
- Vermont
- West Virginia
It is unclear when these states will suspend taxation on Social Security. However, some states are heading towards reducing or eliminating these taxes. For example, West Virginia has launched a gradual process, with individuals and co-applicants who were exempt from state income taxes in 2024 from 35% of Social Security benefits and 65% in 2025, and by 2026, We are planning a full exemption. Less than $100,000.
Federal tax obligations are uniform across the state
Despite state-level fluctuations, everyone must comply with federal tax regulations on Social Security benefits. The Internal Revenue Service (IRS) determines tax obligations based on “combined income.”
- Adjusted Total Revenue (AGI): This is total income excluding Social Security.
- Tax-free interest: This includes interest that is not subject to federal taxes from the US Treasury.
- Half of Social Security benefits: This accounts for 50% of total social security income per year.
Once the combined income is calculated, the IRS uses it to determine the percentage of social security benefits that are taxable.
Understanding federal taxes for social security
An important aspect of federal taxes on social security is determining how much of your interests are “qualified to be taxed.” For example, if you are co-married with a total income of over $44,000 and receive $30,000 in Social Security benefits each year, 85% of your benefits, or $25,500, would be considered taxable. This amount is added to other income and is taxed at the usual income tax rate. If classified as a 22% tax system, the tax on benefits is $6,600, which is significantly less than if the total amount was taxed at 85%.
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