The States That Still Tax Social Security (The List Keeps Shrinking)

Search for states that tax Social Security and you will find lists of nine, eleven, thirteen. Most of them are out of date.

On a $40,000 Social-Security-only income, exactly one state in fifty charges anything at all.

The list has been shrinking for a decade, and it is now short enough that it has stopped being a useful way to compare states for retirement. What is left is a more interesting question — because whether your Social Security gets taxed by a state depends less on the state than on how much other income you have.

A note before you start. This is general education, not tax advice. Every state figure comes from this site's own fifty-state income-tax dataset, which records each state's Social Security treatment with a citation per state, and is computed by its retirement state-tax engine for a single filer aged 70 at the income levels stated. Filing status, age and total income all change the answer. Figures are for tax year 2026. State legislatures have revised this area repeatedly in recent years, more than almost any other in state taxation — so a figure that matters to your decision is worth confirming against your own state's department of revenue.

1. The actual list, at four income levels

The number of states taxing any of your Social Security is not one number. It rises with your other income:

Read the first and last rows together. The same person, in the same state, can be taxed on their benefit or not depending entirely on what else they have coming in.

That is because most of the states still in this space do not tax Social Security outright. They tax it above an income threshold — so the question is never "does my state tax Social Security" but "does my state tax Social Security at my income".

2. Why the old lists are wrong

If you have read that a dozen or more states tax Social Security, that was true not long ago.

A sustained run of state legislation has removed most of them. The pattern repeats across states: an outright tax becomes a tax above a threshold, the threshold rises, then the exemption becomes complete. Several states have completed that arc in the last few years.

Three examples from this site's own dataset:

Nebraska phased its exemption in over four years — 5%, then 40%, then 60%, then 100% from 2024, with no sunset. The old income test is gone, and the dataset flags this as the most commonly repeated error about the state.

Missouri removed its income ceilings entirely for 2024 forward, so the exemption applies regardless of filing status or adjusted gross income. The old $100,000-married figure is still widely quoted.

Michigan never taxes a dollar of it, because the state begins from federal adjusted gross income and then fully subtracts the federally-taxable portion.

The practical lesson: an article about state taxation of Social Security ages faster than almost anything else in personal finance. Check the year on anything you read, including this.

3. It has stopped being a useful way to rank states

A comparison that no longer separates anybody is not a comparison.

If forty-four to forty-nine states treat your benefit identically, then "does it tax Social Security" tells you almost nothing about whether a state is a good place to retire. Yet it remains the headline test in most rankings, because it used to be a real differentiator and the rankings have not caught up.

Where the variation actually lives now:

The 401(k) row is the one that matters for most modern retirees, because that is where their money is. A state that exempts Social Security and taxes 401(k) withdrawals in full is a materially different proposition from one that exempts both — and both look identical on a Social-Security-only ranking.

4. The federal tax is the bigger story

State taxation of Social Security is a shrinking issue. Federal taxation of it is not, and it applies in all fifty states.

Up to 85% of your benefit can be included in your taxable income, depending on a figure called provisional income — roughly your adjusted gross income, plus any tax-exempt interest, plus half your Social Security benefit.

Below a threshold, none of the benefit is taxable. Above it, an increasing share becomes taxable, up to a ceiling of 85%.

Two things about that are worth understanding properly.

It is not that 85% of your benefit is taxed at 85%. Up to 85% of the benefit gets added to your taxable income, and is then taxed at your ordinary rate like anything else.

And the thresholds are not indexed for inflation. They have been fixed in nominal terms since they were introduced, which means an increasing share of retirees crosses them every year purely through benefit increases. This is the quiet reason more people pay this tax each year without anything having changed in the law.

5. How the federal calculation actually works

Worth walking through once, because almost every explanation of it stops at "up to 85%" and that is the least useful part.

Step one: work out provisional income. Take your adjusted gross income, add any tax-exempt interest — municipal bond interest counts here even though it is not taxable — and add half your Social Security benefit.

Step two: compare it against two thresholds. There is a lower one and an upper one, and they differ by filing status. Below the lower threshold, none of your benefit is taxable. Between the two, up to 50% of the benefit becomes taxable. Above the upper one, up to 85%.

Step three: the amount actually included is the lesser of two calculations, which is why the answer is "up to" rather than a flat percentage. In practice most people above the upper threshold end up close to 85% of the benefit being included, but not exactly.

Three consequences of that structure

Municipal bond interest does not help here. It is excluded from taxable income and then added back into provisional income. A retiree who moved into municipal bonds specifically to reduce tax may find the move does nothing for this particular calculation.

Half your benefit is in the figure that decides how much of your benefit is taxed. That circularity is deliberate and it means a benefit increase alone can push you over a threshold.

And a single dollar matters more near a threshold than anywhere else. In the band where each additional dollar of income drags additional benefit into taxability, the marginal effect is compounded — which is the mechanism section 6 describes.

6. Where the thresholds sit, and why this article does not print them

They are published, they are specific to filing status, and this article deliberately does not quote them.

Not because they are secret, but because they are exactly the kind of figure that is worth looking up for the year you are filing rather than reading in an article. They have not been indexed for inflation, which means they have not moved — but that is a fact about the past, not a commitment about the future, and legislation in this area has been active.

Where to find them: the Social Security Administration publishes the calculation, and the IRS publishes a worksheet that walks through it line by line. Your tax software does it automatically, which is why most people never see the arithmetic.

What is worth knowing without looking anything up:

There are two thresholds, not one. Crossing the lower one starts the effect; crossing the upper one is where it becomes expensive.

They are much lower than people expect. The most common reaction on seeing them is that they are set at income levels a great many retirees exceed — which is precisely why this affects far more people than it did when they were set.

And married filing separately is treated harshly. Couples who file separately while living together face a materially worse calculation, which occasionally surprises people who separated their returns for an unrelated reason.

7. The interaction that costs the most

Here is the part with real planning value.

A traditional 401(k) or IRA withdrawal raises your provisional income. A larger provisional income makes more of your Social Security taxable. More taxable Social Security raises your income again.

Which means a withdrawal can be taxed at an effective rate well above your nominal bracket — you pay tax on the withdrawal, and on the additional Social Security the withdrawal dragged into taxability.

This is sometimes called the tax torpedo, and it is a genuine and well-documented effect rather than a metaphor.

A Roth withdrawal does not enter provisional income at all.

That is the single most actionable fact in this article. In a year where an extra dollar of ordinary income would drag more benefit into tax, the same dollar taken from a Roth costs nothing and drags nothing.

8. What to do about it

Know your provisional income, not just your taxable income. They are different figures and the second one does not tell you whether you are near the threshold.

Check whether you are close to a threshold before any large withdrawal. If you are, the order you draw from matters more than usual — see the withdrawal-order guide.

Use Roth money to stay under it in the years it matters. Not as a permanent policy, but as a tool for specific years.

Consider the years before you claim. If you have not started Social Security yet, your provisional income has no benefit in it — which makes those years unusually good ones for traditional withdrawals and Roth conversions, because there is no benefit to drag into tax.

And do not choose a state on this alone. With forty-four to forty-nine states charging nothing, it is close to a settled question. What your state does to a pension or a 401(k) withdrawal is where the real money is.

9. If you are in one of the six

Montana, Utah, Vermont, Colorado, Connecticut and Minnesota are the states where some of your Social Security can be taxed at the income levels above.

Two of those deserve a specific note, because this site's dataset flags them:

Connecticut applies a threshold with phase-out mechanics that the dataset records as needing confirmation for the current year — the exact behaviour above the threshold, and how the pension subtraction interacts with it, are the kind of detail that changes with legislation.

Colorado has thresholds recorded for some filing statuses and flagged for others, specifically married-filing-separately and head-of-household.

Which is not a reason to distrust the list — it is a reason to check your own filing status against your state's current instructions rather than assuming the single-filer answer applies to you. In all six of these states the treatment turns on a threshold, and a threshold's exact placement is precisely the sort of figure a legislature adjusts.

And in most of the six, an age-triggered exclusion or a general retirement-income exclusion may cover you anyway, which is why the state-by-state calculator answers this better than a list can.

10. The claiming decision sits behind all of this

One thing worth flagging, because it changes the shape of the problem rather than the arithmetic.

When you claim Social Security determines how many years you have with no benefit in your provisional income.

Someone who claims at 62 has a benefit in the calculation from 62 onward. Someone who delays to 70 has eight years in which their provisional income contains no Social Security at all — which are eight years in which a traditional withdrawal or a Roth conversion cannot drag a benefit into taxability, because there is no benefit yet.

Those years frequently coincide with the low-income gap before RMDs begin, which makes them doubly valuable: low brackets, and no benefit to torpedo.

That is not by itself an argument for delaying. The claiming decision turns on longevity, on whether you need the money, on a spouse's benefit, and on several things this article is not about. But it is a genuine and frequently overlooked input, and it is worth knowing that the two decisions are connected rather than separate.

The practical version: if you are delaying anyway, use the gap. If you are not, the conversion window is shorter and the case for using it deliberately is stronger.

11. The one number worth carrying

If you take a single thing from this article, make it this:

Whether your Social Security is taxed — federally, and in the six states where it is still possible — is decided by your OTHER income, not by your benefit.

Which means it is a variable you partly control. The benefit is fixed. The withdrawals that push you over a threshold are not.

That is a more useful frame than a list of states, and it is the one that survives the next round of legislation.

12. What actually changed, and what did not

A short summary, because the two halves of this article point in opposite directions and it is easy to come away with the wrong impression.

What changed: state taxation of Social Security is close to over. A decade of legislation has taken it from a real differentiator between states to something that affects one to six states depending on your income. If you have been avoiding a state because of this, the reason may no longer exist.

What did not change: federal taxation of it is getting worse, quietly. The thresholds are fixed in nominal terms, benefits rise, and so the share of retirees paying it rises every year without any legislation at all. That is the opposite trajectory, and it applies everywhere.

Which means the planning has moved. It used to be a question about geography. It is now a question about the order and timing of your own withdrawals — a variable you control, in whichever state you live.

And that is a better position to be in. You cannot legislate your state's treatment of your benefit. You can decide which account this year's spending comes out of.

Frequently asked questions

Which states tax Social Security? On a $40,000 Social-Security-only income, only Montana. Add other income and Utah and Vermont join, then Colorado, Connecticut and Minnesota at higher levels. The number depends on your total income because most of these states tax the benefit only above a threshold.

I read that nine states tax it. Is that wrong? It is out of date. A sustained run of state legislation has removed most of the states that used to. Nebraska completed a four-year phase-in to a full exemption in 2024; Missouri removed its income ceilings entirely for the same year. Articles written before those changes are still widely circulated.

Does the federal government tax my Social Security? It can, in all fifty states. Up to 85% of your benefit can be added to your taxable income depending on your provisional income — roughly your AGI plus tax-exempt interest plus half your benefit. Below a threshold none of it is taxable.

Is 85% of my benefit taxed at 85%? No, and this is a common misreading. Up to 85% of the benefit is included in taxable income, and that included amount is then taxed at your ordinary rate like any other income.

Why do more people seem to pay this every year? Because the federal thresholds are not indexed for inflation. They have been fixed in nominal terms since they were introduced, so benefit increases push a growing share of retirees over them without any change in the law.

What is the tax torpedo? The effect where a traditional withdrawal raises your provisional income, which makes more of your Social Security taxable, which raises your income again — so the effective rate on that withdrawal is well above your nominal bracket. A Roth withdrawal avoids it entirely, because it does not enter provisional income.

Should I pick a retirement state based on Social Security taxation? No. With forty-four to forty-nine states charging nothing, it barely separates them. What a state does to a pension or a 401(k) withdrawal varies far more — 19 states charge nothing on a 401(k)-heavy retiree against 25 on a public pension.

When are the best years for a Roth conversion? Frequently the years before you claim Social Security, because your provisional income has no benefit in it yet — so a conversion cannot drag a benefit into taxability. Combined with the low-income gap before RMDs begin, those years are the most valuable planning window most retirees have.

What to do next

Work out your provisional income before you plan any large withdrawal. It is the figure that decides this, and it is not the one on your tax return.

• Retirement state tax calculator — your own income mix, all fifty states, cited per state
• RMD calculator — the withdrawals you will eventually be forced to take
• The Retirement Withdrawal Order Playbook — the tax torpedo, and the two other cliffs beside it
• What your state actually does to capital gains — the other income type states treat very differently