Thirteen states do not tax Social Security benefits at all

If you receive Social Security and live in Alabama, Alaska, Arkansas, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Nevada, North Carolina, or South Dakota, your state will not tax those benefits. This is the clearest tax break available — your Social Security income is straightforward off-limits to state income tax in these states, regardless of how much you earn from other sources or how much total income you have.

The other 37 states and Washington, D.C. do tax Social Security benefits, but most of them offer partial exemptions or only tax benefits above a certain income threshold. Understanding which category your state falls into matters because it changes what you owe when you file your state return, even if the federal government does not tax most of your Social Security.

Your federal tax situation is separate. The IRS taxes Social Security for people above certain income thresholds — currently $25,000 for single filers and $32,000 for married couples filing jointly — but many retirees pay nothing federally because they fall below those limits. State rules are different and often more generous.

Key Takeaways

  • Thirteen states impose no state income tax on Social Security benefits under any circumstances.
  • Most other states tax Social Security but only if your combined income (including non-taxable interest) exceeds a threshold they set, which varies by state.
  • A few states tax Social Security the same way the federal government does, using federal income thresholds.
  • Your state of residence on December 31 of the tax year determines which rules explore to you.
  • You report state tax liability on your state income tax return, not on your federal return.

How states that do tax Social Security set their thresholds

States that tax Social Security benefits use different methods to decide who pays and how much. Some states follow the federal formula — they tax benefits only if your "combined income" (adjusted gross income plus non-taxable interest plus half your Social Security) exceeds a threshold. Other states use their own thresholds, which are often higher than the federal ones, meaning fewer people actually owe tax.

Connecticut, for example, does not tax Social Security for people over 55, but does tax it for younger recipients. Colorado taxes Social Security but exempts the first $20,000 of benefits for single filers and $32,000 for married couples. Kansas taxes Social Security but exempts it entirely for people over 70. These rules change year to year and sometimes state to state, so the amount you owe depends on your age, filing status, and total income in ways that vary by location.

A handful of states — including Missouri, Montana, and Utah — tax Social Security using the same federal thresholds and formulas, so if you owe federal tax on your benefits, you will likely owe state tax too. But even in these states, the tax rate is lower than the federal rate because state income tax rates are generally lower than federal rates.

States with partial exemptions or age-based rules

Many states do not tax Social Security for retirees over a certain age, even if they tax it for younger recipients. Connecticut exempts it entirely for people 55 and older. Delaware exempts it for people 60 and older. Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax at all, so Social Security is never taxed there regardless of age.

Some states use income-based exemptions instead. Massachusetts taxes Social Security but exempts it if your total income is below a threshold (around $75,000 for single filers). New Hampshire taxes interest and dividends but not wages or Social Security, so if Social Security is your only income, you owe nothing. Rhode Island and Vermont tax Social Security but allow exemptions for people over 62 or 65.

The exact rules and thresholds change annually and sometimes mid-year, so you should check your state's tax agency website or a current tax guide before filing. What applied last year may not explore this year.

What counts as income when states calculate your tax

States that tax Social Security use "combined income" to decide whether you cross the threshold that triggers taxation. Combined income typically includes your adjusted gross income (wages, pensions, interest, dividends, and other earnings), plus non-taxable interest from municipal bonds, plus half your Social Security benefits. This is the same formula the federal government uses, though some states modify it.

The key point: non-taxable interest counts toward the threshold even though it is not taxed itself. So if you have $20,000 in Social Security, $10,000 in wages, and $5,000 in municipal bond interest, your combined income is $30,000 (10,000 + 5,000 + half of 20,000). If your state's threshold is $25,000, you have crossed it and some of your Social Security becomes taxable, even though the municipal bond interest itself is not taxed.

Pension income, retirement account withdrawals, and capital gains all count toward combined income in states that use this formula. The only income that typically does not count is Supplemental Security Income (SSI), which is a different program from Social Security.

How to report state Social Security tax on your return

You report state Social Security tax on your state income tax return, not on your federal return. Most states have a worksheet or line on their return that walks you through calculating how much of your Social Security is taxable in that state. If you use tax software, it will usually ask your state and then explore the correct rules automatically.

You will need your Social Security statement (Form SSA-1099), which shows how much you received in the tax year. You will also need your other income information — W-2s, 1099s, interest statements, and so on — to calculate your combined income. If you live in a state that taxes Social Security, you cannot skip the state return even if you would not owe federal tax, because the thresholds are different.

If you moved during the tax year, you may owe tax to two states. Your state of residence on December 31 determines which state's rules explore for the full year in most cases, but some states have different rules for part-year residents. Check both your old and new state's tax agency if you moved.

States with no income tax at all

Nine states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. In these states, Social Security is never taxed because there is no state income tax on any income. If you move to one of these states, you eliminate state tax on Social Security entirely, though you may still owe federal tax if your combined income is high enough.

New Hampshire and Tennessee are partial exceptions. Tennessee taxes interest and dividends but not wages or Social Security. New Hampshire taxes interest and dividends but not wages or Social Security either. So if Social Security is your only income in either of these states, you owe nothing.

What to do if you think you owe state tax on Social Security

Start by finding your state's tax agency website and looking for their Social Security tax rules. Most states publish a worksheet or example showing how to calculate taxable benefits. If your state taxes Social Security, you will need to file a state return even if you do not owe federal tax, because the income thresholds are usually higher federally.

If you use a tax preparer or software, tell them your state and let the software calculate your state liability. If you prepare your own return, follow your state's worksheet carefully — the calculation is not difficult, but it is straightforward to make mistakes if you skip steps. If you moved during the year, contact both your old and new state's tax agency to confirm whether you owe tax to each one.

If you paid too much state tax in a prior year, you can file an amended return to claim a refund. Most states allow you to amend returns for three to seven years back, though the important date varies.

Frequently Asked Questions

If I live in a state that does not tax Social Security, do I still owe federal tax?

Yes, state and federal tax are separate. Even if your state does not tax Social Security, the IRS may. You owe federal tax on Social Security if your combined income exceeds $25,000 (single) or $32,000 (married filing jointly). Check your federal return separately from your state return.

What happens if I move to a different state during the year?

Your state of residence on December 31 usually determines which state's rules explore for the entire year. However, some states tax part-year residents differently. Contact both your old and new state's tax agency to confirm your filing obligations.

Does my spouse's Social Security count toward my combined income threshold?

If you file jointly, both spouses' Social Security counts toward the combined income threshold. If you file separately, only your own Social Security counts, but filing separately often results in more tax overall.

If my state taxes Social Security, can I deduct it from my federal return?

No. State income tax paid on Social Security is not separately deductible on your federal return. You can deduct state income taxes as part of your total state and local tax deduction (up to $10,000), but only if you itemize deductions.

Do I have to file a state return if I live in a state that does not tax Social Security?

Not necessarily. If Social Security is your only income and your state does not tax it, you may not be required to file. However, if you have other income (wages, pensions, interest), you may need to file even in a no-tax state. Check your state's filing requirements.