Only 8 States Still Tax Social Security in 2026. Find Out If Yours Still Does

Most retirees assume a Social Security check is either taxed everywhere or taxed nowhere. The truth is a patchwork. The federal government may tax part of your benefits depending on income, but at the state level, 42 states and the District of Columbia leave them alone. Only eight still reach in. Whether yours is one of them, and whether it actually costs you anything, are two very different questions.

The eight states are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. The list keeps shrinking. West Virginia finished a three-year phase-out for tax year 2026, with exemptions of 35% in 2024, 65% in 2025, and 100% this year. That moved the count from nine states to eight. Kansas, Missouri, and Nebraska repealed their Social Security taxes in earlier years.

Being on the list does not mean you will pay. Every one of the eight states shields at least some retirees with exemptions, deductions, or credits tied to income. Before sorting out those state rules, though, it helps to understand the federal layer sitting above them, because a new federal deduction has changed what many retirees owe and comes with an end date.

A New Federal Deduction Lowers Taxes on Benefits, but Only Through 2028

The One Big Beautiful Bill Act, signed July 4, 2025, created a temporary $6,000 deduction for taxpayers 65 and older, or $12,000 for married couples where both qualify. It starts shrinking at $75,000 in modified adjusted gross income for single filers and $150,000 for joint filers, and disappears above $175,000 and $250,000. It applies to tax years 2025 through 2028 unless Congress renews it.

The deduction does not repeal the federal tax on benefits. It lowers taxable income so more seniors fall below the thresholds where benefits become taxable. The White House Council of Economic Advisers estimates about 88% of retirees on Social Security will owe no federal tax on their benefits, up from 64% under prior law. Independent analysts note nearly two-thirds already owed none, and the Bipartisan Policy Center found the relief most meaningful for middle-income seniors.

So the federal layer is both real and temporary. It helps middle-income seniors most, and its schedule ends after 2028 unless Congress renews it. State taxes are a separate matter with their own rules. Each of the eight states sets its own income thresholds, and those numbers decide whether a retiree pays anything, which is where the details get specific.

Four States Shield Single Filers With Incomes From $75,000 Up to $104,200

The four most generous exemptions set high bars. Connecticut exempts benefits for single filers with adjusted gross income below $75,000 and joint filers below $100,000. Minnesota’s 2026 thresholds are $86,410 for individuals and $110,780 for couples. New Mexico exempts single filers earning up to $100,000 and joint filers up to $150,000. Rhode Island exempts retirees at full retirement age with income below $104,200 as singles.

The other four work differently. Colorado lets residents 65 and older deduct all federally taxed benefits when AGI is up to $75,000 for singles or $95,000 for couples. Vermont and Utah both raised their exemption levels in 2025, with Utah using a tax credit instead of a flat exemption. Montana’s break is more modest: a $5,500 subtraction for people 65 and older, so retirees with investment income can still owe tax on part of their benefits.

Above those thresholds, the bill can become real. Minnesota’s top rate is 9.85% for single filers with taxable income above roughly $200,000, and Vermont’s top rate is 8.75%. Both also tend to have higher living costs than many Sun Belt states. That combination is what pushes some retirees to consider moving, and it is also where the math can turn against them.

Moving to Avoid the Tax Can Cost More Than It Saves

Moving for a lower tax bill is rational only if the whole picture improves. Compare total costs, not one line. That means state income tax, property tax, sales tax, and everyday prices. New Mexico, for example, combines high exemption thresholds with a cost of living below the national average. Texas has no income tax but some of the highest effective property tax rates in the country, which weighs on homeowners.

Your income mix matters as much as your address. A state that exempts Social Security may still tax IRA withdrawals or pensions heavily, and one that taxes benefits modestly may cost less overall. If your total income is modest, you may owe little in any of these states, and relocating could cost more in moving expenses and lost support networks than you would ever save in taxes.

The state list is a map of rules, not a map of bills. For most retirees, the larger variable is not which state they live in but how long today’s federal break lasts. The senior deduction ends after 2028 unless Congress acts, and the Committee for a Responsible Federal Budget estimates the bill could pull Social Security’s trust fund depletion forward to around 2032. Both are projections, and both depend on decisions not yet made.

This article is general information, not tax advice; your state’s revenue department or a tax professional can confirm how these rules apply to your income.