Living in One of These 42 States? You're in Luck When It Comes to Social Security.
Key Points
Most states don't tax the Social Security benefits of their residents.
Eight states do, but many seniors in these states don't owe them.
You're more likely to owe federal Social Security benefit taxes, regardless of where you live.
- The $23,760 Social Security bonus most retirees completely overlook ›
You probably aren't choosing where to retire based solely on finances. You may be thinking about where your family and friends are, how you want to spend your time, and what kind of weather you prefer.
At the same time, there's no denying that finances shape the quality of life you're able to have in retirement. There are many factors that go into this, including taxes, the overall cost of living, and Social Security. In that last case, you're at an advantage if you retire in one of the following 42 states.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
These 42 states don't tax Social Security benefits
Residents of the following 42 states don't pay any state taxes on their Social Security benefits, allowing them to hold onto more of their checks:
- 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
- West Virginia
- Wisconsin
- Wyoming
West Virginia residents should note that the state only recently phased out its benefit tax. 2026 is the first year when none of its residents will owe state taxes on their benefits. If your income is high, there is a chance you could still owe state benefit taxes when you file your 2025 return. However, you shouldn't have to worry about this going forward.
It's also worth noting that many seniors living in the eight states not listed above don't pay taxes on their Social Security benefits, either. Most states with that tax benefit have exemptions for low- to middle-income households.
Federal Social Security benefit taxes remain a possibility
While it's great to have one fewer tax to worry about, it doesn't mean you'll avoid Social Security benefit taxes altogether. The federal government still taxes many seniors' checks, even those with average incomes.
Single adults with provisional incomes -- which is your adjusted gross income (AGI) plus any nontaxable interest from municipal bonds and half your annual Social Security benefit -- greater than $25,000, and married couples with provisional incomes greater than $32,000 will owe the federal government a portion of their checks.
You may wind up with a smaller tax refund or face a tax bill. In the latter case, you might need to set aside some money to cover these taxes in future years. If you're worried about how this might affect your retirement taxes, it's worth consulting an accountant who can give you personalized advice.
The $23,760 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.
View the "Social Security secrets" »
The Motley Fool has a disclosure policy.
Recommended Articles
