For most Americans, the check they receive from the Social Security Administration is the bedrock of their retirement budget. It’s money you earned over decades of hard work, and naturally, you want to keep as much of it as possible. The good news is that the vast majority of states—41 of them, to be exact—keep their hands off your Social Security benefits entirely.

However, if you live in one of the nine states that still tax these benefits, you might be sending a portion of your monthly check back to the state capital. The landscape, thankfully, is shifting in favor of retirees. State legislatures are increasingly voting to repeal or reduce these taxes to attract and retain seniors. In fact, one state on this list is eliminating the tax completely starting in tax year 2026.

Here is a practical guide to the nine states that still tax Social Security, the specific income thresholds that might protect you, and the one state where this tax is about to become history.

Quick Summary: The 2026 Landscape

• The Trend: The number of states taxing Social Security is shrinking. Missouri and Nebraska recently ended their taxes, and West Virginia is next.
• The “One” Dropping the Tax: West Virginia becomes fully tax-free for Social Security starting tax year 2026.
• The Reality: Even in states that tax benefits, most retirees pay zero state tax on Social Security because of generous income exemptions.
• The Outlier: Utah uses a unique tax credit system rather than a standard exemption.

The Good News: West Virginia Drops the Tax in 2026

If you live in the Mountain State, relief is here. West Virginia has been aggressively phasing out its tax on Social Security benefits over the last few years. The phase-out schedule was designed to gradually reduce the burden on retirees:

• 2024: 35% deduction allowed.
• 2025: 65% deduction allowed.
• 2026: 100% deduction (fully exempt).

This means that for the tax year 2026 (the return you will file in early 2027), you will pay zero state income tax on your Social Security benefits in West Virginia, regardless of your income level. This move makes West Virginia significantly more attractive to retirees comparing it to neighbors like Virginia or Maryland.

The 8 States That Still Tax Social Security (and Who Actually Pays)

While the following states still have laws on the books taxing Social Security, the “sticker price” can be misleading. Many have high income thresholds that exempt the middle class. Here is the breakdown for the 2025–2026 tax years.

1. Colorado

Colorado is often listed as a state that taxes Social Security, but for most traditional retirees, it is effectively tax-free. The state differentiates heavily based on age.

• Age 65 and Older: You can deduct all of your federally taxable Social Security benefits. If you are 65+, you generally won’t pay state tax on your benefits.
• Age 55 to 64: This is where the tax hits. However, starting in 2025, a new law allows you to deduct all Social Security income if your Adjusted Gross Income (AGI) is $75,000 or less (single) or $95,000 or less (joint). Above these limits, you typically get a standard $20,000 pension/annuity subtraction.

2. Connecticut

Connecticut has a reputation for high taxes, but its exemptions for retirees are relatively robust. You are fully exempt from paying state taxes on Social Security if your Adjusted Gross Income (AGI) falls below these thresholds:

• Single Filers: Less than $75,000.
• Married Filing Jointly: Less than $100,000.

If you earn above these amounts, you may still only be taxed on a portion (no more than 25%) of your benefits, but high earners should definitely consult a tax professional.

3. Minnesota

Minnesota uses a tiered approach. While it taxes Social Security, recent legislation has significantly raised the income caps, exempting most middle-income retirees.

• The Rule: For the 2025 tax year, benefits are generally exempt if your AGI is below approximately $82,190 (single) or $105,380 (married).
• The Phase-Out: If you earn above these limits, the exemption isn’t lost all at once; it gradually phases out. This creates a “tax ramp” rather than a cliff, but high-income earners in the North Star State will likely see a tax bill.

4. Montana

Montana has a unique system. It taxes Social Security benefits but offers a standard subtraction for seniors to help offset the cost. However, unlike New Mexico or Colorado which offer full exemptions for many, Montana’s approach is less generous for those with higher incomes.

• The Deduction: Taxpayers age 65 and older generally receive a subtraction (around $5,500) from their federal taxable income.
• The Impact: Because Montana taxes many forms of retirement income, it is often ranked as one of the least tax-friendly states for wealthy retirees. Always check the latest legislative updates, as Montana frequently debates bills to repeal this tax.

5. New Mexico

New Mexico has made aggressive moves to become more retiree-friendly. While technically a “taxing” state, the exemptions are high enough that most retirees are safe.

• Single Filers: Exempt if income is under $100,000.
• Married Filing Jointly: Exempt if income is under $150,000.

If you earn over these amounts, the tax applies. Note that these are “cliffs”—earning one dollar over the limit could theoretically expose your benefits to taxation, so careful income planning is essential.

6. Rhode Island

Rhode Island protects your Social Security from taxes, but only if you meet two specific criteria: age and income.

• Age Requirement: You must have reached your Full Retirement Age (FRA) (typically 66 or 67) to qualify for the exemption. Early retirees (e.g., age 62) do not qualify.
• Income Requirement: Your AGI must be below approximately $107,000 (single) or $133,750 (married). (Note: These figures are indexed for inflation and change slightly each year; verify the 2025 rates with the state division of taxation).

7. Utah

Utah is an outlier. Instead of an income exemption (where you subtract income from your tax return), Utah uses a tax credit.

• How it works: You calculate your tax liability including Social Security, and then apply a tax credit to cancel it out.
• The Limits: For the 2025 tax year, the state expanded eligibility. The full credit is available if your Modified AGI is under $45,000 (single) or $90,000 (married).
• The Phase-Out: Above those amounts, the credit is reduced by 25 cents for every dollar of income. This aggressive phase-out means upper-middle-class retirees in Utah are more likely to pay tax on their benefits than those in New York or California.

8. Vermont

Vermont is another state actively raising its thresholds to help seniors, though it remains one of the stricter states on this list.

• The Thresholds: For 2025, lawmakers increased the exemption thresholds. You are typically fully exempt if your AGI is $55,000 or less (single) or $70,000 or less (married).
• The Phase-Out: The exemption phases out for single filers between $55,000 and $65,000, and for couples between $70,000 and $80,000. If you earn above the upper limit, your benefits are fully taxable at state rates.

Federal Taxes: The “Combined Income” Formula

Even if you live in a tax-free state like Florida or Texas, Uncle Sam might still want a cut. It is crucial to remember that federal taxation of Social Security affects retirees nationwide.

The IRS uses a metric called “Combined Income” to decide if your benefits are taxable.

“Combined Income = Adjusted Gross Income (AGI) + Nontaxable Interest + 1/2 of your Social Security Benefits”

Federal Thresholds (2025):

• Individual:
  • $25,000 – $34,000: Up to 50% of benefits may be taxable.
  • Over $34,000: Up to 85% of benefits may be taxable.
• Married Filing Jointly:
  • $32,000 – $44,000: Up to 50% of benefits may be taxable.
  • Over $44,000: Up to 85% of benefits may be taxable.

Note: “Taxable” doesn’t mean the IRS takes 85% of your check. It means 85% of the benefit amount is added to your income and taxed at your regular rate.

3 Actionable Tips to Lower Your Taxable Income

If you live in one of the nine states listed above and find yourself near the income “cliffs,” a little planning can save you thousands.

1. Manage Your RMDs: Required Minimum Distributions (RMDs) from traditional IRAs often push retirees over income thresholds. If you are charitable, consider a Qualified Charitable Distribution (QCD). This satisfies your RMD without counting toward your AGI, potentially keeping you eligible for state tax exemptions.
2. Roth Conversions: Converting traditional IRA money to a Roth IRA (ideally before you start Social Security or in low-income years) creates tax-free income later. Roth withdrawals generally do not count toward the “Combined Income” formula.
3. Check State-Specific Deductions: States like Colorado and New Mexico often have additional senior deductions for medical expenses or general retirement income that can lower your AGI enough to qualify for the Social Security exemption.

When to Consult a Professional

State tax laws are complex and change frequently. You should consider speaking with a CPA or tax professional if:

• You are considering moving to a new state specifically for tax reasons.
• Your income is hovering just above the exemption “cliff” for your state (e.g., earning $101,000 in New Mexico as a single filer).
• You have multiple sources of income, such as a pension, part-time work, and investments, which complicate your Combined Income calculation.

Closing Thoughts

Retirement planning is about more than just how much you save; it’s about how much you keep. If you live in West Virginia, 2026 brings a well-deserved raise in the form of tax elimination. For those in the remaining eight states, the situation is nuanced. While the tax exists, the generous exemptions mean that for many of you, your Social Security check remains yours to keep.

Always review your specific situation before filing, as state legislatures are constantly updating these thresholds to keep pace with inflation and support senior citizens.

This article provides general retirement education and information only. Everyone’s financial situation is unique—what works for others may not work for you. For personalized advice, consider consulting a qualified financial professional such as a CFP or CPA.

Last updated: February 2026. Retirement benefits, tax laws, and income thresholds change frequently—verify current details with official state tax authorities.