9 States Where Your Social Security Benefits Aren’t Tax-Free

While most Americans enjoy tax-free Social Security benefits at the state level, retirees in 9 U.S. states are still subject to some form of state income tax on their Social Security payments in 2025.

This additional tax burden comes at a time when millions of retirees are struggling with higher costs of living, and many are considering going back to work just to stay afloat.

In this article, we explain which states still tax Social Security, the income thresholds, exemptions, and efforts underway to reform or eliminate these state taxes.

Why Do Some States Still Tax Social Security Benefits?

Federal taxes on Social Security apply to roughly 40% of the 70 million recipients in the U.S., depending on income level.

However, states can set their own tax rules regarding these benefits. Over the years, many have eliminated these taxes to ease financial stress on older adults.

Yet, nine states continue to tax some or all of residents’ Social Security income, with certain exemptions or credits for lower-income retirees.

States That Tax Social Security Benefits in 2025

Here is a detailed overview of the nine states where Social Security is not fully exempt from state taxes in 2025:

State	Income Threshold (Individual)	Tax Notes
Colorado	Age 65+: Full exemption; Age 55–64: Partial	Social Security is deductible based on age and income bracket.
Connecticut	$75,000 (single) / $100,000 (joint)	75% of benefits are exempt; the rest may be taxed if income exceeds limit.
Minnesota	$84,490 (single) / $108,320 (joint)	Lawmakers support a full exemption, but high earners still taxed.
Montana	$25,000 (single) / $32,000 (joint)	Deductions available, but tax still applies above thresholds.
New Mexico	$100,000 (single) / $150,000 (joint)	Full deduction below threshold; taxed 1.7%–5.9% above.
Rhode Island	$104,200 (single)	Must be full retirement age and under income limit for exemption.
Vermont	$50,000 (single) / $65,000 (joint)	Taxes fully apply for incomes over $60K (single) / $75K (joint).
Utah	$90,000+ (single or joint)	Benefits taxed at 4.55%, but low-income earners get tax credits.
West Virginia	Being phased out	65% reduced in 2024; will be eliminated completely by 2026.

States Moving to Eliminate These Taxes

West Virginia

West Virginia is phasing out Social Security taxation by 2026. In 2024, affected taxpayers already saw a 65% tax reduction. This phased repeal is part of a broader state-level effort to ease retiree tax burdens.

Kansas and Others

Though not on the 2025 list anymore, Kansas previously taxed benefits but recently passed laws to fully eliminate Social Security tax. This move reflects a growing national trend toward protecting retirees’ benefits from state taxation.

The Bigger Picture: Federal vs. State Taxation

While President Trump and some lawmakers have proposed ending federal taxes on Social Security, such a change would require Congressional approval. As of now, federal taxation remains for higher-income earners:

• Individuals earning over $25,000 and couples over $32,000 may be taxed up to 85% of their benefits at the federal level.
• These are separate from state taxes, which vary by jurisdiction.

Why This Matters for Retirees

For seniors living in these 9 states, taxation can reduce their monthly income, making it harder to cover essentials such as healthcare, housing, and groceries. With inflation and rising medical costs, many retirees find their benefits don’t stretch far enough.

A recent survey showed:

• Only 10% of retirees are satisfied with their Social Security income.
• Nearly 33% are considering re-entering the workforce to meet expenses.

These tax policies can play a significant role in a retiree’s decision about where to live during retirement.

Although most states have eliminated taxes on Social Security benefits, retirees in nine states still face this financial burden in 2025.

While some states like West Virginia and Utah are actively working on reforms, others continue to enforce income thresholds that result in partial or full taxation of benefits.

Understanding how and where your benefits are taxed is vital for effective retirement planning.

If you live in one of these states—or plan to move—it’s important to consult local tax rules and consider how this may affect your financial well-being.

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