Verdict: eight states tax Social Security benefits in 2026, and every one of them exempts lower and middle incomes to some degree. Most retirees in those states pay no state tax on benefits at all. Federal tax is the one far more people actually pay.

The eight

Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. Everywhere else, benefits are not taxed by the state, either because the state exempts them or because it has no income tax at all.

Be careful with older articles. This list has shrunk fast, and much of what is published still says nine, twelve or thirteen states.

What changed recently

West Virginia finished phasing out its tax on benefits, so from the 2026 tax year it no longer taxes them. Kansas, Missouri and Nebraska all repealed in 2024. The direction of travel has been one way for several years.

Being on the list does not mean you pay

This is where headline lists mislead. Every one of the eight has thresholds, deductions or credits.

Colorado lets residents 65 and over deduct their federally taxable benefits. Connecticut, New Mexico, Rhode Island and Vermont exempt benefits below income thresholds that cover most retirees. Utah offers a credit that phases out as income rises. Minnesota has a subtraction that removes the tax for most people. Montana follows the federal treatment most closely.

A retiree living on benefits alone typically owes nothing in any of the eight. The tax generally bites when substantial other income sits alongside the benefits.

Federal tax is the bigger story

State tax gets the attention, but federal tax reaches far more people. Depending on your provisional income, which is your other income plus half your benefits, up to 85% of your benefits can be subject to federal income tax. That applies in all fifty states.

If you are choosing where to retire on tax grounds, the state treatment of Social Security is usually a smaller factor than property taxes, sales taxes and the general cost of living. Our sister site Best Life Index compares those state by state.

Do not move for this alone

Eight states, most of which will not tax you anyway, is a thin reason to relocate. Housing costs, healthcare access, and being near family will affect your retirement far more than a benefits exemption you may never have needed.

Frequently asked questions

Eight: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. The other 42 do not tax benefits at all.

No. West Virginia completed its phase-out, so from the 2026 tax year benefits are no longer taxed there.

Often not. Every one of the eight has income thresholds, deductions or credits, and a retiree living mainly on benefits typically owes nothing. The tax usually applies when significant other income sits alongside.

It can be, in every state. Depending on your provisional income, up to 85% of your benefits may be subject to federal income tax. Far more people pay this than pay any state tax on benefits.