States That Tax Social Security Benefits (2026)

The 9 SS-Taxing States in 2026

The 41 Full-Exemption States (plus DC)

The remaining states fully exempt Social Security benefits from state taxation in 2026. The list includes the 9 states with no broad personal income tax (where the exemption is automatic), plus 32 states (and DC) that levy a personal income tax but exempt Social Security explicitly:

Each state's exemption is established by state statute or longstanding administrative practice. Most have been continuously exempt; Missouri (2024), Nebraska (2024) and West Virginia (2026) are recent additions.

The Phase-Out Trend Since 2018

The number of states taxing Social Security has fallen sharply over the past decade. In 2018, around 13 states still taxed SS; by 2026 that has fallen to 9, with active phase-outs in additional states. The most recent eliminations:

• Missouri: Eliminated SS taxation effective tax year 2024 per Missouri Department of Revenue. Previously taxed SS above income thresholds. HB 2400 (2023) repealed the SS taxation entirely.
• Nebraska: Phased out SS taxation over four years (2022-2025) under LB 873 (2022). Effective tax year 2024 onward, no Nebraska tax on Social Security benefits. Per the Nebraska DOR.
• West Virginia: Phased out under HB 2024 (2024). 2024 tax year: 35% exempt. 2025: 65% exempt. 2026: 100% exempt (eliminated). Phase-out completes for tax year 2026.
• Iowa: SS exempt as part of the broader 2023 transition to a flat-tax structure.

The political logic of the phase-outs is consistent: aging populations, increasing senior political weight, and the relatively small revenue impact of SS taxation (most retirees have moderate incomes that fall below state exemption thresholds anyway). The remaining 9 SS-taxing states each have specific revenue and political reasons for retention; further eliminations are likely over the next 5-10 years but not all 9 will follow on the same timeline.

Federal Tax Treatment of Social Security

Federal taxation of Social Security applies regardless of state. Per IRS Publication 915, the federal tax depends on the filer's combined income (also called provisional income), which equals:

• Adjusted gross income (excluding SS benefits)
• Plus tax-exempt interest
• Plus 50% of Social Security benefits

Federal taxability brackets:

• Combined income below $25,000 single ($32,000 MFJ): 0% of SS benefits taxable federally
• $25,000-$34,000 single ($32,000-$44,000 MFJ): Up to 50% of benefits taxable
• Above $34,000 single ($44,000 MFJ): Up to 85% of benefits taxable

The federal thresholds have not been indexed for inflation since their 1983 enactment. As a result, an increasing share of retirees face some federal SS taxation each year. For a retiree with $30,000 in SS benefits and $40,000 in pension income, combined income is $40,000 + $15,000 (50% of SS) = $55,000, well above the $34,000 single threshold, so up to 85% of the $30,000 SS = $25,500 is added to federal taxable income.

Worked Example: $50,000 SS Benefits Plus $30,000 Pension, Three States

Couple, MFJ, both age 67. $50,000 combined Social Security benefits, $30,000 private pension. Federal combined income = $30,000 + $25,000 (50% of SS) = $55,000. Federal taxable SS = approximately $42,500 (85% of SS due to combined income above the $44,000 MFJ threshold).

For this profile, Florida and Pennsylvania are tied at zero state tax (both exempt all retirement income). Colorado costs approximately $1,760 in state tax, primarily because the SS exclusion (limited to $40,000 MFJ at age 65+) does not cover the full $50,000 SS benefit, leaving $10,000 of SS plus the $30,000 pension taxable at CO's 4.4% flat rate.

Choosing a Retirement State: SS Tax Is One Factor of Many

For retirees comparing states, the SS-taxation question is often less important than the broader retirement-income treatment. The 9 SS-taxing states with their income-based exemption thresholds frequently exempt the typical retiree fully; the differentiator becomes pension and 401(k) treatment.

Pennsylvania is unique in fully exempting all forms of retirement income (Social Security, federal pensions, state and local government pensions, military pensions, private pensions, 401(k) and IRA distributions). Illinois and Mississippi are the other two states that fully exempt all retirement income. For high-income retirees these three states produce zero state tax on retirement income regardless of the source mix.

By contrast, states like California (taxes pension and 401(k) at full ordinary rates, exempts SS) can be more expensive at retirement than the 9 SS-taxing states for retirees with substantial 401(k) balances, even though California exempts SS. The full retirement-income picture is captured in our retirement income by state scorecard; SS taxation is one row in a larger comparison.