Some retirees are surprised to learn that the federal government, in certain circumstances, taxes Social Security benefits. Even more surprising to some is that certain individual states also apply their own income tax to Social Security payouts. Fortunately, not many states fall into this category. Even those that do tax Social Security often provide certain exemptions or ways to reduce or eliminate the tax, typically based on age or income. Here’s a list of the states that don’t tax Social Security, along with some details about those that do.
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States That Don’t Tax Social Security
As of 2021, 37 states plus the District of Columbia do not tax Social Security benefits. These states include the nine that don’t have any income tax at all, which are:
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Alaska
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Florida
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Nevada
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New Hampshire
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South Dakota
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Tennessee
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Texas
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Washington
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Wyoming
Note that while New Hampshire does tax investment income, it does not tax wages or Social Security payouts.
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The remaining 28 states plus the District of Columbia implement various credits or exemptions to help taxpayers avoid state-level Social Security taxes. These states are:
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Alabama
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Arizona
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Arkansas
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California
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Delaware
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Georgia
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Hawaii
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Idaho
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Illinois
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Indiana
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Iowa
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Kentucky
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Louisiana
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Maine
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Maryland
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Massachusetts
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Michigan
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Mississippi
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New Jersey
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New York
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North Carolina
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Ohio
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Oklahoma
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Oregon
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Pennsylvania
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South Carolina
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Virginia
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Wisconsin
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Washington, D.C.
If you live in any of these states — or the District of Columbia — you won’t have to worry about paying state taxes on your Social Security income.
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States That Reduce Social Security Taxation Based on Age or Income
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Colorado
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Connecticut
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Kansas
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Minnesota
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Missouri
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Montana
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Nebraska
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North Dakota
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Rhode Island
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Vermont
Specifics vary, but all the states in this category have some type of Social Security offset based on how old you are or how much you make. Colorado, for example, allows taxpayers 55 and older to subtract some of their Social Security income, while Kansas provides a total exemption for taxpayers earning less than $75,000, regardless of filing status. In Montana, some Social Security benefits may be taxable so it advises its taxpayers to complete a worksheet to determine the taxation of their Social Security benefits.
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