Your Guide to States Without Social Security Taxation in 2025

Understanding which states don’t impose taxes on your Social Security can significantly impact your retirement budget. With 41 states plus Washington, D.C. offering tax-free Social Security benefits in 2025, retirees have substantially more favorable opportunities than in previous years. The landscape has shifted dramatically, with recent policy changes in Missouri, Nebraska, and Kansas creating even more relief for beneficiaries.

The Expanding List of States Offering Tax Relief

The good news for retirees: the majority of the country doesn’t tax Social Security income. States that do not tax your social security now include 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, and Wyoming, along with Washington, D.C.

This represents a dramatic change from just a few years ago. “The expansion of tax-free states demonstrates a clear trend toward protecting retirement income,” explained Brian Kuhn, CFP and financial advisor at Wealth Enhancement Group. “Each state maintains its own unique provisions, and recent victories in the Midwest show momentum continues.”

Which States Still Tax Social Security?

Only nine states continue to impose taxes on Social Security benefits heading into 2025: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. However, even this list is shrinking. West Virginia is phasing out its Social Security tax entirely, with complete elimination scheduled for 2026.

The shift reflects changing attitudes about retirement security. Social Security remains essential for millions—approximately 40% of Americans over 65 depend on these benefits for at least half their income, according to AARP data. Federal taxation can consume up to 85% of benefits depending on overall income, making state tax policies even more consequential.

How State Tax Decisions Impact Your Retirement Income

The practical implications are substantial. If you receive $30,000 annually in Social Security and your state’s effective tax rate on other income is 5%, avoiding state taxation saves you $1,500 per year. Aggregated across retirees, these savings become considerable—Missouri retirees collectively save approximately $309 million annually by avoiding state Social Security taxes.

Certain states with remaining Social Security taxes offer targeted relief. Colorado, for instance, permits residents aged 65 and older to fully deduct federally-taxed Social Security benefits from their state tax returns since 2022. Effective in 2025, this exemption expands to include those aged 55-64 with adjusted gross income not exceeding $75,000 for individuals or $95,000 for married couples filing jointly.

Strategic Planning for Your Retirement Location

Understanding these tax implications requires examining your specific state’s regulations and personal circumstances. According to financial advisor Jeff Rose, CFP and founder of Good Financial Cents, “The cumulative effect creates meaningful financial differences. Nebraska retirees, for example, keep roughly $17 million collectively that would otherwise go to state taxation.”

Whether you’re already retired or planning ahead, knowing which states don’t tax your social security benefits should factor into broader financial decisions. The favorable tax treatment in 41 states represents genuine purchasing power preservation for millions of Americans managing their retirement income strategically.