Where You Live Can Make a Real Difference: A Guide to States That Don't Tax Social Security in 2025

For millions of Americans heading into or already in retirement, Social Security represents a critical income stream. According to AARP data, roughly 40% of seniors aged 65 and above depend on these benefits for at least half of their annual income. Yet here’s something many people overlook: the amount you actually pocket from your Social Security check varies dramatically depending on which state calls home.

The State Tax Advantage Is Expanding

Here’s the good news—if you’re concerned about state-level taxation on Social Security, you’re living in an increasingly favorable environment. The number of states that don’t tax Social Security continues to grow, with 41 states plus Washington, D.C., offering complete exemption from state income tax on these benefits as of 2025.

This trend accelerated recently. Missouri, Nebraska, and Kansas all made the decision to stop taxing Social Security income in 2024, joining the vast majority of states offering tax relief to retirees. West Virginia has gone even further, phasing out Social Security taxes entirely with full exemption beginning in 2026.

“The states that don’t tax Social Security far outnumber those that do,” explains Brian Kuhn, CFP and financial advisor at Wealth Enhancement Group. “What’s important to understand is that each state writes its own tax rules, and those rules shift over time.”

The Complete List: 41 States That Don’t Tax Social Security

The full roster of states that don’t tax Social Security in 2025 includes:

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, Wyoming, plus Washington, D.C.

Just 9 States Still Tax Social Security

Only a handful of states continue taxing Social Security benefits in 2025:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia (phasing out by 2026)

However, even within these states, tax relief varies. For instance, Colorado residents aged 65 and older have been able to fully deduct federally-taxed Social Security benefits since 2022. Beginning in 2025, that exemption expands to include those aged 55 to 64 earning up to $75,000 (or $95,000 for joint filers).

How Much Are Retirees Actually Saving?

The financial impact of living in a non-taxing state can be substantial. Consider this calculation: if your state’s effective tax rate on all income sources is 5%, and you receive $30,000 annually in Social Security benefits, you’re looking at a direct savings of $1,500 per year.

The aggregate numbers tell an even more compelling story. “In Missouri alone, retirees are collectively saving approximately $309 million annually,” notes Jeff Rose, CFP and founder of Good Financial Cents. “Nebraska retirees pocket roughly $17 million in state tax savings every year. That’s real money staying in retirees’ pockets.”

Additional Considerations

It’s worth noting that federal taxation still applies. Up to 85% of your Social Security benefits can be subject to federal income tax depending on your overall income level. However, the combination of living in a state that doesn’t tax Social Security—plus being in one of the states that offer additional deductions or exemptions—can meaningfully protect your retirement income.

The key takeaway: if you’re planning retirement or considering a location change, your home state’s approach to Social Security taxation deserves serious attention. The difference between states that don’t tax Social Security versus those that do can amount to thousands of dollars annually in your retirement years.