41 States That Won’t Tax Social Security Benefits in 2025

Where you reside can significantly impact the amount of your Social Security benefits that you are able to retain.

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Species is dwindling and only nine will remain by 2025.

“Each state is responsible for its own laws and regulations, which can be subject to change, as witnessed in Missouri and Nebraska in recent times.”

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Only 8 US States Will Tax Social Security in 2025

Nine states will still tax Social Security benefits in 2025, including:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

Changes to Social Security are expected to be implemented beginning in 2026.

"Every state has tax laws that allow eligible individuals to deduct certain expenses or income, but only up to certain income levels or ages, making each state's tax rules distinct from the others," said Kuhn.

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Most states in the US will not tax Social Security in 2025

By 2025, as per the existing legislation.

These states are:

• 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
• Washington, D.C.
• Wyoming

Here are the Social Security tax savings rates in the States with no state income tax:
1. Alaska - up to 7.98% in savings
2. Florida - up to 9.20% in savings
3. Nevada - up to 9.28% in savings
4. New Hampshire - up to 9.36% in savings (only for dividend and interest income)
5. South Dakota - up to 9.92% in savings
6. Tennessee - up to 9.19% in savings
7. Texas - up to 9.10% in savings
8. Washington - up to 9.98% in savings
9. Wyoming - up to 9.82% in savings
This speaks to the benefit of living in these no-tax states for retirees. A steady reduction in taxes on Social Security benefits translates into extra cash for retirees.

Calculate your tax rate by looking up the effective rate of tax you paid on all the income sources you have that were taxed, then apply that tax rate to your total Social Security benefits.

So, let's imagine that if you live in a state with a top rate of 5%, and you receive $30,000 in Social Security benefits each year, your savings from this tax rule would be $1,500.

After 2022, a full exemption will be available to those 65 and older with adjusted gross income of $20,000 or less for individuals, or $30,000 or less for couples filing jointly. For 2025, this exemption will be expanded to include those between 55 and 64 years old, who have an adjusted gross income of $75,000 or less for individuals, or $95,000 or less for couples filing jointly.

It's essential to examine the particular tax laws where you reside and take into account your individual tax circumstances.

From a broader point of view, the amount saved for retirees whose income is not subject to taxation is quite significant.

In Nebraska, it's approximately $17 million that goes straight into retirees' pockets, rather than being lost to state taxes.

He contributed to the development of the reporting for this article.

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