Exploring Taxation of Social Security Benefits by State

Exploring Taxation of Social Security Benefits by State

Exploring Taxation of Social Security Benefits by State.For retirees dependent on Social Security benefits, the tax implications can significantly impact their financial stability.

Exploring Taxation of Social Security Benefits by State

While Social Security benefits are taxable at the federal level, many states have their own rules regarding taxation. In this article, we’ll delve into the states where retirees can enjoy Social Security benefits without any state-level taxation.

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States That Do Not Tax Social Security Benefits

The District of Columbia and a total of 39 states have chosen not to tax Social Security benefits. This decision provides retirees in these states with a financial advantage, allowing them to keep a larger portion of their hard-earned benefits. Here’s the list of states that exempt Social Security benefits from state taxation:

  1. Alabama
  2. Alaska (no income tax)
  3. Arizona
  4. Arkansas
  5. California
  6. North Carolina
  7. South Carolina
  8. Colorado (starting in 2023)
  9. North Dakota
  10. South Dakota (no income tax)
  11. Delaware
  12. Florida (no income tax)
  13. Georgia
  14. Hawaii
  15. Idaho
  16. Illinois
  17. Iowa
  18. Kentucky
  19. Louisiana
  20. Maine
  21. Maryland
  22. Massachusetts
  23. Michigan
  24. Mississippi
  25. Nevada (no income tax)
  26. New Hampshire (no income tax)
  27. New Jersey
  28. New York
  29. Ohio
  30. Oklahoma
  31. Oregon
  32. Pennsylvania
  33. Tennessee (no income tax)
  34. Texas (no income tax)
  35. Virginia
  36. West Virginia
  37. Washington (no income tax)
  38. Washington DC
  39. Wisconsin
  40. Wyoming (no income tax)
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States with Varying Tax Rates

While the above states provide tax relief by not taxing Social Security benefits, it’s essential to note that eleven states do tax them to some extent. The specific rates, exemptions, and income limits may differ by state, making it crucial for retirees to understand the local tax implications. Here are the Social Security income tax rates for the states that do tax benefits:

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  1. Connecticut: 3 to 6.99%
  2. Kansas: 3.1 to 5.7%
  3. Minnesota: 5.35 to 9.85%
  4. Missouri: 0 to 5.4%
  5. Montana: 1 to 6.75%
  6. Nebraska: 2.46 to 6.84%
  7. New Mexico: 1.7 to 5.9%
  8. Rhode Island: 3.75 to 5.99%
  9. Utah: 4.95%
  10. Vermont: 3.35 to 8.75%
  11. West Virginia: 3 to 6.5%


Understanding the taxation of Social Security benefits in your state is essential for planning your retirement finances effectively. Depending on your location, you may be able to minimize your tax burden and maximize your retirement income.

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