Every month, around 74 million Americans receive a Social Security check. For most of them, the number printed on that statement is not the number that arrives in their bank account – federal taxes already chip away at a meaningful portion for anyone above a certain income. What fewer people realize is that your state can also take a cut, and whether it does depends entirely on your zip code.
The rules are not obvious, they are not consistent, and they are not static. Some states protect lower-income retirees and go after higher earners. Some use age as the deciding factor. Some are in the middle of changing their laws right now. If you assumed your state was hands-off because you haven’t noticed a problem yet, it may be worth a second look.
As of the 2025 tax year – the returns most Americans filed in 2026 – nine states imposed at least some state income tax on Social Security benefits. One of those, West Virginia, finished eliminating its tax entirely as of January 1, 2026, which means 2025 was the last year it applied there. The other eight remain in effect. Here is what each state actually does, and how to know whether you are in the group that owes.
1. Colorado
According to AARP, Colorado gets credit for being one of the more generous states on this list, and the rules do favor older residents significantly. Coloradans age 65 and older can fully deduct Social Security benefits from their state income, while residents between 55 and 64 can do the same if their adjusted gross income (AGI) is $75,000 or less for an individual and $95,000 or less for a couple filing jointly.
Those with AGIs above those thresholds can still deduct up to $20,000 in retirement income, including Social Security. For that group, retirement income above that level is taxable at the state’s flat rate of 4.4 percent.
The practical effect is that most Colorado retirees over 65 pay nothing on their Social Security at the state level. The pressure falls mainly on people in their late 50s and early 60s who are collecting early or on disability benefits and whose income clears the exemption threshold. If you’re 63 and had a good year in the market, a single large withdrawal can change your tax picture fast. One IRA distribution to cover a home repair can be enough to tip you into the taxable tier, even if every prior year was fine.
2. Connecticut
Connecticut still has the word “tax” attached to Social Security, but for most of its retirees, the real-world impact is zero. For single filers, Social Security benefits are not taxed in Connecticut if adjusted gross income is under $75,000. For married couples filing jointly and head of household filers, the threshold is $100,000.
If a taxpayer’s AGI exceeds the Connecticut income threshold, no more than 25 percent of Social Security benefits can be taxed. That cap on exposure is meaningful. Even in a bad year, Connecticut limits the damage in a way that states like Montana do not.
The state has considered full repeal. A bill to erase the income thresholds was introduced in January 2025 but stalled in committee. So the rules are unchanged for now, and higher earners in the state are still looking at a partial tax on their benefits. If you’re a Connecticut retiree with significant pension income or required minimum distributions from a large IRA, the odds of clearing $75,000 in AGI are not trivial, and it’s worth accounting for that in any year-end planning.
3. Minnesota
Minnesota is the state most likely to surprise people who think of it as a high-tax state and assume the worst, because its thresholds are actually reasonably protective. For 2026, Minnesotans with AGIs of up to $86,410 for an individual and up to $110,780 for a couple filing jointly do not have to pay state taxes on their Social Security income. Residents with higher incomes – up to $126,410 for a single filer and $150,780 for couples – may qualify for a partial tax break. Above those thresholds, all federally taxable benefits are subject to state income tax.
Kiplinger reports that Minnesota taxes income at rates ranging from 5.35 percent to 9.85 percent, making it the most expensive state on this list for a high-income retiree who clears the exemption entirely. If your combined income from Social Security, pensions, investment accounts, and rental properties puts you solidly above $126,000 as a single filer, you could be looking at a meaningful state tax bill on top of whatever you owe the federal government.
The silver lining is that Minnesota’s full-exemption threshold is high enough to protect a large share of ordinary retirees. Someone living primarily on Social Security and a modest 401(k) distribution is likely to stay well under the line. The people who feel Minnesota’s tax most sharply tend to be those with substantial retirement savings who are drawing down multiple income streams at once.
4. Montana
Montana is the least generous state on this list, and the rules reflect it. No tax applies if AGI is below $25,000 for a single filer or $32,000 for couples filing jointly. Benefits become partially taxable at AGI levels up to $34,000 for singles or $44,000 for joint filers, and up to 85 percent of benefits can be taxed above those levels.
Montana’s income tax rate is 5.65 percent on income over $95,000, with a lower threshold of $47,500 for single filers. According to Mercer Advisors, the treatment of Social Security retirement income is not as generous in Montana as it is in most states – taxpayers 65 and over receive only a $5,500 subtraction from federal taxable income.
The $25,000 threshold for single filers is the critical number to understand here. Taxsharkinc.com reports that the average retired worker now collects about $2,071 a month after the 2026 cost-of-living adjustment, which works out to nearly $25,000 annually. A single retiree living on Social Security alone barely clears Montana’s no-tax floor. Add even a small pension or part-time income, and they’re in taxable territory. That’s a notably lower bar than what Connecticut or Minnesota set, and it catches people who genuinely are not wealthy retirees.
5. New Mexico
New Mexico draws some attention as a Social Security-taxing state, but in practice the majority of retirees there don’t owe the state anything on their benefits. Social Security income is fully deductible for New Mexicans with AGIs below $100,000 for individuals and $150,000 for couples filing jointly. Above those limits, the portion of benefits subject to federal income tax must be included in state taxable income. New Mexico taxes income at rates from 1.5 percent to 5.9 percent.
The $100,000 single-filer threshold is among the most generous on this list. A retiree would need a substantial amount of non-Social Security income to exceed it, which means the state’s tax applies mainly to people with significant pensions, ongoing rental income, or large required minimum distributions from retirement accounts. If your total retirement picture is primarily Social Security plus modest savings, New Mexico likely poses no state tax burden on your benefits at all.
Where New Mexico gets more complicated is for higher earners who exceed the threshold but don’t expect to. A good year in the market, an inherited IRA, or an unexpected windfall can push someone over the line, and once they’re there, the benefits they’ve been treating as fully exempt become partially taxable. Tracking income carefully before the end of each year matters in a state with a threshold this clean-cut.
6. Rhode Island
Rhode Island ties its exemption to two conditions at once: your age and your income. The state does not tax benefits for people who have reached full retirement age as defined by the Social Security Administration – 66 and 10 months for people born in 1959, or 67 for those born in 1960 and later – and whose AGI falls below certain thresholds. For 2025, those thresholds were $133,750 for a couple filing jointly and $107,000 for a single filer. Those who haven’t reached full retirement age, or those above the income thresholds, face state tax at rates ranging from 3.75 percent to 5.99 percent.
If you’re navigating questions about full retirement age alongside your Social Security planning, our look at how retirement age is changing covers the key 2025 updates and what they mean for your monthly benefit.
The age condition is the piece that catches people off guard. In most states, the relevant question is purely about your income. In Rhode Island, you can be a relatively modest earner and still owe state tax on your benefits if you’re collecting before full retirement age. That’s an unusual design, and it specifically affects people who retire early due to health issues, caregiving demands, or industry changes, not just wealthy early retirees making a strategic choice.
For Rhode Islanders at or past full retirement age with income under the threshold, the situation is actually quite comfortable – no state tax on benefits at all. The frustration mostly belongs to those in the window between early claiming age (62) and full retirement age who didn’t expect the state to penalize the timing of when they started collecting.
7. Utah
Utah taxes Social Security using the same approach as the federal government – it applies benefits to the state’s flat income tax rate – but it offsets the impact with a credit designed to protect lower- and middle-income retirees. Utah uses the federal formula to determine how much Social Security income is taxable at the state’s flat rate of 4.5 percent, but it offers a full or partial credit for those taxable benefits.
Utah also loosened its rules in 2025, when Governor Spencer Cox signed Senate Bill 71, lifting the full-exemption income line to $54,000 for single filers (up from $45,000) and to $90,000 for joint filers (up from $75,000). The state says the change helps about 90,000 seniors. Utah still taxes benefits above those lines through a partial credit, so higher earners are not fully off the hook.
The structure works out reasonably well for middle-income retirees, who often find that the credit eliminates or nearly eliminates their actual state tax liability on Social Security income. Where it gets more expensive is for retirees with higher incomes who have moved past the credit’s phase-out range. At that point, Utah’s 4.5 percent flat rate applies to the taxable portion without any offset, making it one of the more straightforward but less forgiving calculations on the list.
8. Vermont
Vermont protects lower-income retirees fairly well and then applies its full state income tax bracket structure to everyone above the threshold – there’s no gentler slope in between for many filers. Vermont allows a full exemption of Social Security income from state taxation for retirees who meet income requirements. For 2026, if you are married and filing jointly, Social Security benefits are tax-exempt if your AGI is $70,000 or less. Single and married filing separately filers qualify for a full exemption with an AGI of $55,000 or less. Single filers may qualify for a partial exemption up to an AGI of $64,999, with $79,999 being the ceiling for joint filers.
Above those thresholds, Vermont’s income tax brackets apply – the state taxes income at rates that can reach the higher end of the scale for larger incomes. If you’re a Vermont retiree with Social Security, a pension, and IRA withdrawals that together push your AGI past $65,000 as a single filer, you’re looking at state tax on a meaningful portion of your benefits. Over a 20-year retirement, that adds up in ways that catch people by surprise when they first run the numbers.
Vermont expanded its relief in 2025, when Governor Phil Scott signed Senate Bill 51, raising the full-exemption threshold to $55,000 for single filers, up $5,000 from the prior year. That’s a real improvement for people near the line, and it’s worth rechecking whether your AGI keeps you under the new threshold even if you were taxable before.
9. West Virginia
West Virginia deserves its own mention precisely because its story just ended. The 2025 tax year offered a 65 percent deduction as the final transitional step in the state’s phase-out – meaning residents who filed 2025 returns in 2026 still owed state tax on 35 percent of their federally taxable benefits. West Virginia completed its phase-out in 2026, and benefits are now 100 percent exempt from state tax going forward.
For West Virginians who noticed a Social Security payment reduction on their state returns in recent years, that’s now behind them. The state joined a growing list of places – Kansas, Missouri, and Nebraska all did the same beginning with the 2024 tax year – that have eliminated this tax entirely. AARP has long lobbied state lawmakers to reduce or eliminate state taxes on Social Security income, and West Virginia’s move represents one of the more recent examples of that pressure producing results.
The broader pattern is worth noticing. States have been moving in one direction on this issue for years, and none has moved the other way. For anyone living in one of the remaining eight states, that’s either a reason for optimism or at least a reason to pay attention to what’s being debated in their statehouse. The list has been shrinking, and it may yet shrink further.
What to Watch For
The numbers on this list are not permanent. States adjust their income thresholds annually – sometimes for inflation, sometimes through new legislation – and a threshold that kept you exempt last year may not do the same this year. Rhode Island hadn’t even set its 2026 thresholds as of late April 2026. Utah raised its limits through new legislation signed in 2025. Vermont did the same. These are not stable rules you look up once and file away.
The deeper issue is that state taxes on Social Security benefits rarely operate in isolation. They interact with federal taxes, with your income from other sources, and with decisions you make about when to take IRA distributions or realize capital gains. A single large withdrawal in one tax year – the kind that seems minor when you’re replacing a roof or helping a child with a down payment – can push you past a state exemption threshold you’ve comfortably stayed under for years. The Social Security payment reduction you see on your state return that year isn’t a mistake. It’s a predictable result of a system where the lines are precise and the consequences arrive all at once. Running your numbers before December 31, not after April 15, is what actually changes the outcome.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.