How 41 States With No Social Security Tax Shape Retirement Planning in 2026

For millions of Americans approaching retirement, the state where you live matters significantly. As of 2026, a substantial number of states continue to protect retirees by not taxing Social Security income—a benefit that translates to meaningful annual savings for those who qualify. The landscape of state Social Security taxation has evolved considerably, with more jurisdictions moving toward tax relief rather than imposing additional burdens on retirees’ benefits.

According to AARP data, roughly 40% of Americans aged 65 and older depend on Social Security for at least half their income, making tax policy decisions a crucial consideration for retirement planning. The good news is that across the United States, 41 states plus Washington, D.C., currently provide exemptions from state taxation on Social Security income—a significant expansion from previous years.

The Growing Movement: States Ending Social Security Taxation

The trend toward protecting Social Security income accelerated in 2024 and continues into 2026. Missouri, Nebraska, and Kansas all made the decision to stop taxing Social Security benefits, reflecting a broader recognition of the importance of preserving retirement income.

“The expanding group of states offering Social Security tax relief is much larger than those that still tax these benefits,” explained Brian Kuhn, CFP, a financial advisor at Wealth Enhancement Group. “Each state maintains its own regulations, which can shift, but the general direction has been favorable to retirees.”

One notable development occurred with West Virginia, which is phasing out its Social Security taxation. As of 2026, West Virginia residents no longer face state income taxes on Social Security benefits—a policy that went into effect at the start of the year.

The Nine States That Continue to Tax Social Security

As the majority of states move toward exempting Social Security income, nine jurisdictions still maintain taxation on these benefits:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia (through 2025; no longer applicable in 2026)

However, even within these states, exceptions exist. Colorado residents aged 55 to 64 with adjusted gross income of $75,000 or less (or $95,000 for couples filing jointly) now qualify for full deductions on federally taxed Social Security benefits—a policy expanded for 2025 and continuing into 2026.

The Comprehensive List: 41 States With No Social Security Tax

The states that currently exempt Social Security income from state taxation represent the vast majority of the nation:

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, Wyoming, plus Washington, D.C.

This comprehensive list demonstrates that retirees in most of the country enjoy protection from state-level Social Security taxation.

Understanding Your Personal Tax Savings

The financial impact of living in states with no social security tax is substantial when calculated across entire populations. “In Missouri alone, retirees collectively benefit from approximately $309 million in annual tax savings,” noted Jeff Rose, CFP and founder of Good Financial Cents. “In Nebraska, that figure reaches about $17 million—money that stays in retirees’ pockets rather than flowing to state revenue.”

To calculate your own potential savings, apply your state’s effective tax rate to your total Social Security income. For example, if your state’s effective rate is 5% and you receive $30,000 annually in Social Security benefits, you would save approximately $1,500 per year by residing in a state that doesn’t tax Social Security income.

The actual calculation, however, depends on understanding your specific state’s regulations and your personal tax situation. Professional financial advisors recommend reviewing your state’s current tax code and consulting with a tax specialist to determine your exact filing requirements.

Why State Taxation Policies Matter for Retirement Income

Federal taxation already affects Social Security income significantly—up to 85% of your benefits can be subject to federal income tax depending on your overall income level. When combined with potential state taxation, the reduction in benefits can become substantial. This is why states’ decisions to exempt or tax Social Security income carry real weight in retirement planning decisions.

The movement toward states with no social security tax reflects growing recognition that retirees deserve protection for income they earned and were taxed on during their working years. As you approach or enter retirement, understanding whether your state taxes Social Security income remains an essential element of comprehensive financial planning. With 41 states currently providing exemptions, many Americans can take advantage of this valuable tax benefit.