38 States That Don’t Tax Social Security Benefits | Smart Switch: Personal Finance


With retirement getting more expensive, people want to figure out how to stretch their Social Security dollars as far as possible. You probably know things you can do to increase your profits, like increase your income today. But most people don’t think enough about avoiding taxes on Social Security benefits.

Not all states have them, but if yours does, you could lose a portion of your government checks each year. This is what you need to know.

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These 38 states do not have taxes on Social Security benefits

The following 38 states do not tax Social Security benefits of any of its residents:

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  1. Alabama
  2. Alaska
  3. Arizona
  4. Arkansas
  5. California
  6. Delaware
  7. Florida
  8. Georgia
  9. Hawaii
  10. Idaho
  11. Illinois
  12. Indiana
  13. Iowa
  14. Kentucky
  15. Louisiana
  16. Maine
  17. Maryland
  18. Massachusetts
  19. Michigan
  20. Mississippi
  21. Snowfall
  22. new hampshire
  23. New Jersey
  24. New York
  25. North Carolina
  26. North Dakota
  27. Ohio
  28. Oklahoma
  29. Oregon
  30. Pennsylvania
  31. South Carolina
  32. South Dakota
  33. Tennessee
  34. Texas
  35. Virginia
  36. Washington
  37. Wisconsin
  38. Wyoming

If you live in Washington DC, you also won’t have to worry about district taxes on your Social Security benefits. But it’s a different story for residents of these 12 states:

  1. Colorado
  2. Connecticut
  3. Kansas
  4. Minnesota
  5. Missouri
  6. Mountain
  7. Nebraska
  8. New Mexico
  9. Rhode Island
  10. Utah
  11. Vermont
  12. West Virginia

But don’t panic if you live in one of these places because not all Social Security recipients in these states owe taxes. Each state government sets its own rules determining who owes, but generally it’s those with high incomes or high annual Social Security benefits. If you’re concerned, check with your state’s tax department to find out how it determines who pays taxes on Social Security benefits.

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The federal government also taxes profits

Even if your state government doesn’t accept any of your benefits, the federal government may. Decide how much you owe by looking at your combined or provisional income. This is your adjusted gross income (AGI)plus nontaxable interest and half of your annual Social Security benefit.

Here’s what you could owe based on your combined income and filing status:

Marital status

Up to 50% of taxable profits

Up to 85% of taxable profits


Provisional rent between $25,000 and $34,000

Provisional income greater than $34,000

Married Filing Jointly

Provisional rent between $32,000 and $44,000

Provisional income greater than $44,000

Data source: Social Security Administration.

This does not mean that you will lose up to 85% of your benefits. It simply means that you could owe tax on that amount, but the amount you will owe depends on your tax bracket for the year. If you’re in the 12% tax bracket, for example, you may only owe 12% in taxes on up to 85% of your benefits.

Sometimes it is possible to avoid federal and state income taxes by adjusting your spending or relying more on your Roth savings account for withdrawals as you approach the income tax threshold. But if you don’t have Roth savings or need to spend more to cover essential expenses, this may not be an option.

If you know you’ll owe taxes, the best thing to do is accept them and set aside the necessary funds to cover the bill. Or if you get a surprise at tax time, talk to the IRS and see if you can set up a payment plan.

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Being proactive is often the best approach. If you end up with a tax debt you can’t pay, the federal government could start garnishing your social security checks even before they reach you. Nobody wants that, so do your best to stay on top of all your taxes.

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