Social Security is a key source of income for many retirees in the U.S. According to the AARP, 40% of Americans aged 65 and older depend on Social Security for at least half of their income.
However, where you live can impact how much of your Social Security check you keep.
Up to 85% of your Social Security benefits may be subject to federal taxes, depending on your income. On top of that, some states also tax Social Security benefits.
The good news is that the number of states taxing Social Security is decreasing, with only nine states continuing to do so in 2025.
“The list of states that don’t tax Social Security is much longer than the list of those that do,” said Brian Kuhn, CFP, CLU, and financial advisor at Wealth Enhancement Group.
“Each state has its own tax rules, which can change over time, as seen recently in Missouri and Nebraska.”
Missouri and Nebraska stopped taxing Social Security benefits in 2024. Kansas also passed a bill in mid-2024, meaning it will no longer tax Social Security benefits going forward.
States That Will Tax Social Security in 2025
Only nine states will tax Social Security benefits in 2025:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia
Kansas will no longer be part of this list, and West Virginia plans to eliminate Social Security taxes starting in 2026.
“Some states have tax exemptions for residents below certain income levels or of a certain age, so the tax burden varies depending on where you live,” Kuhn noted.
Most States Won’t Tax Social Security in 2025
Most states — 41 plus Washington, D.C. — will not tax Social Security benefits in 2025 under current laws. These include:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Mississippi
- Missouri
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- South Carolina
- South Dakota
- Tennessee
- Texas
- Virginia
- Washington
- Wisconsin
- Washington, D.C.
- Wyoming
How Much Can Retirees Save on Social Security Taxes?
Kuhn explained that you can estimate your Social Security tax savings by looking at your state’s effective tax rate.
For example, if your effective tax rate is 5% and you receive $30,000 in Social Security benefits, you would save $1,500 by living in a state that doesn’t tax Social Security.
However, not everyone in states that tax Social Security will owe the full amount.
For example, Colorado residents aged 65 and older have been able to fully deduct federally taxed Social Security benefits on their state returns since 2022.
Starting in 2025, this exemption will expand to those aged 55 to 64 with an adjusted gross income of $75,000 or less for individuals and $95,000 or less for couples filing jointly.
Savings from these exemptions can be significant. “In Missouri, retirees are expected to save around $309 million per year collectively,” said Jeff Rose, CFP, and founder of Good Financial Cents.
“In Nebraska, retirees could save about $17 million annually. That’s a significant amount that stays in retirees’ pockets instead of going to state taxes.”
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