In America, Social Security is a program that provides financial support to Americans throughout their lives. This plays an important role in the retirement security of many Americans because at least 40% of Americans, who get older, rely on Social Security for their income. For a very long time, every state of America was taxing this benefit over its people but now, in 2025, some states will get a break as they are set to fully exempt Social Security benefits from the state taxes. This tax relief aims to make retirement income stretch further especially with the rising living costs. There are currently 9 states that will tax this benefit in 2025 including Colorado and Montana, but the majority will offer some relief. So, in this article, we will talk about 41 states that will allow retirees, disabled people, and survivors to keep their Social Security benefits.
Alabama
The first state in the United States of America that will not tax Social Security in 2025 is Alabama. It is a southeastern state that is considered the 30th largest by area and 24th most populated of the total 50 states in the US. The Yellowhammer state is one of the many states that will not tax this benefit in 2025 because the state wants to support the growing retiree population and wants to align with the majority of the US states that have already exempted Social Security from taxation.
California
The next American state that will not tax Social Security benefits in the upcoming year is California. It is located in the Western United States and lies on the American Pacific Coast. In 2025, California will not tax the income benefit because according to the state, it is not a state tax but rather a federal tax. The federal government can tax Social Security benefits and depending upon your income, upto 85% of the Social Security benefits could be subject to federal taxation. This move by California aligns with most of the American states because many states have chosen to exempt this benefit from the state income taxes because they want to support the retirees’ financial security.
Alaska
Alaska is the largest state in the United States of America, which is located in the northwest extremity of North America. According to most people, it is considered to be the easternmost, westernmost, and northernmost state in the United States. In 2025, Alaska will join the majority of the American states and will not tax Social Security benefits because this state does not have a state income tax. Due to this, Alaska does not tax the retirement benefits or even the pension payments. In addition to this, Alaska does not have an estate tax, inheritance tax, and sales tax. Further, instead of the Federal Social Security System, the state offers Alaska Supplemental Annuity Plan to its people.
Arkansas
The next US state that has earned its spot in this list is Arkansas. It is a landlocked state, located in the West South Central region of the Southern United States. The state shares borders with Louisiana, Missouri, Mississippi, Tennessee, Oklahoma and Texas. In 2025, the state will not be taxing the Social Security benefits because, in 2017, the state already passed legislation to exempt the Social Security income from the state income taxes. The exemption, though passed in 2017, but took effect in 2018 and became part of a broader tax reform that aimed at reducing the burden of taxes on retirees. This move made Arkansas state more attractive for the retirees.
Arizona
The state is located in the Southwestern region of the United States and shares its border with different states including New Mexico, Utah, and Colorado. In 2025, Arizona will not tax the Social Security benefits because the state exempts them from the state income tax. This exemption has been in place for many years, which aligns the state with the majority of the US states that have opted not to tax social security incomes. This move has been opted by Arizona because it wants to help retirees preserve their benefits and encourage retirement in the state. By not taxing this benefit, Arizona wants to reduce the financial burden on its residents.
Delaware
Delaware is a popular American state which is located in the South Atlantic and Mid-Atlantic regions of the United States. Apart from its name and people, the state is famous around the world because it does not tax Social Security benefits and allows people to feel more financially secure. This is because, just like other American states, Delaware exempts Social Security income from the state income taxes. The state has followed this policy for a very long time so that it can support its retiree population by lowering the tax burden and also allowing them to keep more of their retirement income.
Georgia
Another state that will not tax Social Security benefits in the upcoming year is Georgia. It is a state which is located in the Southeastern region of America and shares its borders with Alabama, South Carolina, North Carolina, Tennessee, and Florida. In 2025, the state will not tax the Social Security benefits because it exempts them from the state income taxes. The popular state has a policy of not taxing this benefit along with railroad retirement because this is a measure that is specially designed to provide financial relief to retirees and make the US state more attractive.
Hawaii
The island state of the United States of America is an archipelago and it is the only state which is located in the tropics. In 2025, the famous state which consists of 137 volcanic islands, will not tax the Social Security benefits because the state excludes it from the state income tax regime. The state has chosen this policy because it wants to provide relief to its retiree population by admitting that Social Security is an important income source for many senior citizens. Because of its current laws and legislations, Hawaii will not tax this benefit which aims to reduce the financial burden on retirees.
Indiana
The state is located in the midwestern region of the United States of America and is commonly referred to as the Hoosier State. Along with the majority of the US states, Indiana will not tax the Social Security benefits in 2025 because this benefit is not included in the state tax regime. This is because the Social Security benefits are taxable under the federal tax and not the state income tax. Indiana will not tax Social Security benefits in 2025 because the state wants to provide financial relief to its retirees and wants to reduce the financial burden on them.
Florida
The state of Florida is located in the southeastern region of the United States and is famous around the world for having a long coastline of around 1350 miles. In 2025, Florida will not be taxing Social Security benefits because the state does not have a state income tax at all. In the United States of America, Florida is one of those states that has no income tax which means that the people are not taxed on any income including the Social Security benefits. In addition to this, Florida does not have inheritance tax, estate tax, and pension tax.
Idaho
The next US state which has cemented its position in this list is Idaho. It is a landlocked state which is located in the Mountian West and Pacific Northwest regions of Western America. In 2025, Idaho will not be taxing the Social Security benefits because it does not fall under the state tax. In the state, Social Security benefits fall under the federal tax regime. Idaho has legislation that exempts these benefits from the state income tax because the state wants to provide relief to its senior citizens by letting them retain more of their retirement income. In 2022, Idaho passed a law that phased out state tax on Social Security income.
Illinois
The capital of Springfield is a famous American state which is located in the midwestern region of the United States. In 2025, the state will be aligning with the other American states and will not tax the Social Security benefits. This is because the state has a long-standing policy of exempting all forms of retirement income from the state income tax. Along with the Social Security benefits, the state also exempts 401(k) withdrawals, pensions, and IRA distributions from the state income tax because it wants to provide financial security to its people. According to the Illinois Department of Revenue, retirees do not have to pay state income tax on the portion of their income that comes from federally taxed retirement income, such as Social Security.
Kentucky
Kentucky is located in the southeastern region of the United States and shares its borders with several states including Illinois, Ohio, West Virginia, and Tennessee. In 2025, the state will not tax the Social Security benefits because all the retirement benefits are exempt from the Kentucky state income tax. The state has adopted this policy for a very long time because it wanted to become a tax-friendly state and provide financial relief to its retirees. In addition to Social Security benefits, the state also exempts the railroad retirement board benefits from the state income tax.
Lowa
The next midwestern state of the United States of America that will not be taxing the Social Security benefits in 2025 is Lowa. The state has legislations that fully exempt the Social Security benefits from the state income tax because it aimed at making the state more tax-friendly. According to the laws of Lowa, the residents of the state are allowed to keep their Social Security benefits tax-free at the state level. This move has aligned the state with the majority of the American states that do not levy tax on retirement benefits. According to the Department of Revenue, while Social Security benefits are excluded from income when computing tax, some Social Security benefits are included in determining whether a taxpayer qualifies for the health insurance deduction.
Kansas
Kansas is a city which is located in the American state of Missouri and is famous around the world for its big area and large population. Along with several other American states, Kansas will not be taxing the Social Security benefits in 2025 because it exempts this income from the state income tax for individuals with a federal adjusted gross income of $75000 or less. This simply means that in Kansas, if a resident has a total income which is less than $75000, then the retirement benefit will not be taxed under the state tax.
Missouri
Another US state that will not be taxing Social Security in the upcoming year is Missouri. In 2025, Missouri will not be levying tax on this retirement benefit because a law with regard to this was passed in 2023 but went into effect in January 2024. According to this law, the Social Security benefits of individuals who are 62 years of age or older are exempt from the state income tax. Also, this law only applies to those benefits that are included in the federal adjusted gross income. Further, this legislation will majorly impact the taxes filed in 2025.
Massachusetts
The state is located in the New England region of the northeastern United States and is commonly known as the 6th smallest state by land area. In 2025, along with other American states, Massachusetts will not tax Social Security benefits because the state exempts the retirement benefit from the state income tax. This measure has been taken because the state wants to help its retirees as the Social Security benefits are their primary source of income.
Louisiana
The famous American state of Louisiana is located in the Deep South and South Central regions of the United States. The state will not be taxing the Social Security benefits in the upcoming year because the retirement benefits are included in the state income tax. According to the Department of Revenue, Social Security benefits that are taxed on the federal return are excluded from Louisiana’s taxable income.
Maine
The next American state that will not tax the Social Security benefits in 2025 is Maine. It is located in the New England region of the United States and its capital is Augusta. The state will not tax the Social Security benefits in the upcoming year because it exempts them from the state income tax. The state has brought in this exemption because it wanted to provide financial relief to its retiring population, by making it more tax-friendly. Further, this move will support the residents of Maine who rely solely on Social Security benefits.
Maryland
The state of Maryland is located in the Mid-Atlantic region of the United States and is the 9th smallest state by land area. According to the state tax regime of Maryland, the state does not levy taxes on Social Security benefits because it is included in the federal tax and not the state tax. In addition to this, the state also exempts the Railroad Retirement benefits from the state income tax because it wants to provide more financial relief to its retiring population.
Nebraska
Nebraska is the next midwestern region state in the United States which will not tax the Social Security benefits in 2025. This is because a bill was passed by the Nebraska legislature that exempted Social Security benefits from the state income taxes. Though the exemption for the Social Security benefits was created in 2022’s LB 873, but it came into effect from January 2024, after which 100% of the federal Social Security benefits are exempted from Nebraska’s taxation.
Michigan
The state of Michigan is located in the Great Lakes region of the Upper Midwest of the United States. In 2025, the Social Security benefits will not be taxed in Michigan because they are exempted from the state income taxes. The Social Security retirement income that is considered taxable on the federal income tax can be subtracted from the Adjusted Gross Income while filling the state taxes in Michigan.
Mississippi
Mississippi is a famous American state which is located in the southeastern region of the United States. Along with several other states such as Florida and California, this state will also not tax Social Security benefits because the state exempts this retirement income from the state income tax. This is so because the tax policy of Mississippi aims to support retirees by allowing them to keep more of their income. In addition to this, Veterans’ Administration payments or workers’ compensation and Railroad Retirement Public Welfare assistance are also exempted from the state income tax.
New Hampshire
The American state of New Hampshire is located in the northeastern region of the United States and Concord is its capital. In 2025, the state will not tax the Social Security benefits because it does not have a state income on retirement income or earned income such as the Social Security benefits. The state taxes only certain kinds of income which means that the retirement incomes are fully exempt from state taxation. Apart from Social Security, retirement distributions and pensions are also safe from state tax.
Nevada
The landlocked state is located in the western region of the United States with Carson City as its capital. In 2025, Nevada will not tax the Social Security benefits because the state does not have a state income tax, and any income received during retirement will not be taxed at the state level. This exemption policy of Nevada has made it popular among retirees, as people can now receive their Social Security and other retirement income without any taxes.
New Jersey
The US state is one of the most densely populated and is located in the northeastern region of America. It is one of the most educated, healthy, diverse, and highly developed American states. New Jersey will not tax the Social Security benefits in the upcoming year because Social Security and the Railroad Retirement benefits are not taxable under the state’s income tax regime. Due to this exemption policy, the Social Security benefits should not be reported as income on the New Jersey state returns. Moderately, the state is considered tax-friendly.
Ohio
Another American state that will not tax Social Security benefits in 2025 is Ohio, which is located in the midwestern region of the USA. This is so because there are only nine states in the US that will levy taxes on the retirement income and Ohio doesn’t fall in them. Also, the state exempts Social Security from the state income tax because it wants to help and support the retirees by allowing them to keep more of their Social Security benefits. Further, this exemption eases the financial burden on the seniors who mainly rely on these benefits.
North Carolina
As mentioned above, Social Security benefits are not taxed in the state income tax rather, they are taxed under the federal tax. Along with other American states, North Carolina also exempts Social Security benefits and other retirement benefits from the state income tax and ensures that retirees receive their retirement benefits free from any taxes. In addition to this, Railroad Retirement benefits are also exempted from state income taxes.
New York
The state of New York is located in the northeastern region of the United States and is the 4th most populated state. In 2025, the famous state will not tax the Social Security benefits because these all are exempted from the state income tax. This tax exemption policy has been in place for many years and helps in providing financial relief to retirees as Social Security benefits serve as the primary source of their income.
North Dakota
The next American state that will not tax Social Security benefits in the upcoming year is North Dakota. The landlocked state located in the upper midwest region of the United States doesn’t tax Social Security benefits because these benefits are exempted from the state income tax. The exemption policy of the state provides support to retiring people because as we all know, these retirement benefits are their main source of income. Also, by doing this, the state has eased the tax burden on the retirees.
Pennsylvania
The American state of Pennsylvania is famous around the world because many big manufacturers such as Harley-Davidson, and Ford have their manufacturing units there. In 2025, the state will not be taxing the Social Security benefits because it has an exemption policy in place which states that all the Social Security benefits will be exempted from state tax. This exemption policy is a part of the state’s broader approach which aims at providing greater relief to retirees. In addition to this, 401(k) withdrawals and pensions are also exempted under the tax regime of Pennsylvania.
Oklahoma
The American state of Oklahoma is located in the South Central region of the United States and shares its borders with many other states such as Texas, Missouri, and Arkansas. In the upcoming year, the state will not be taxing the Social Security benefits because they are exempt from the state income tax. According to the state’s Department of Revenue, these benefits are taxable under the federal tax. In 2020, the state passed legislation that fully exempts the Social Security benefits from the state income tax regardless of their income levels.
Oregon
Oregon is located in the Pacific Northwest region of the United States and has recently become famous around the world because it has decided not to tax Social Security benefits. According to the state’s Revenue Department, Social Security benefits and other retirement benefits such as Railroad Retirement benefits are not taxed under the state income tax. This exemption policy of the state aligns with the majority of the states that do not tax Social Security benefits.
Tennessee
It is a landlocked state located in the southeastern region of the United States and shares its border with many states including Kentucky, North Carolina, Georgia, and Alabama. In 2025, the American state will not tax Social Security benefits because all forms of retirement income are untaxed at the state levels. In addition to this, property tax in Tennessee is very low with an average effective rate of 0.65%.
South Carolina
The famous state of South Carolina is located in the southeastern region of the United States. Just like other American states such as New York, Ohio, and North Carolina, South Carolina also exempts Social Security benefits from state income taxes. The exemption policy has been in place for a very long time because it helps retirees keep more of their income. Further, it ensures that there is less tax burden on the retirees.
South Dakota
The next American state that does not have a state income tax at all is South Dakota. It is located in the North Central region of the United States and is famous around the world for completely forgoing state income taxes, which means that there are no taxes on wages, retirement income, or Social Security benefits. The reason why South Dakota doesn’t have state taxes is that it has state-level regulations that allow trusts to continue without being taxed by the state on income or profits.
Wyoming
The state of Wyoming is a landlocked state which is located in the Mountain West subregion of the United States. In 2025, the popular state will not tax Social Security benefits or other retirement benefits because it does not have its own income tax. This means that people of the state including the retirees do not have to pay taxes on any income including their Social Security benefits. This policy provides several financial benefits to retirees allowing them to keep their income tax-free.
Virginia
The state of Virginia is located in the mid-Atlantic and southeastern regions of the United States. In 2025, the state will not tax the Social Security benefits because these incomes are exempted under the state tax regime. According to Virginia’s Taxation Department, if any portion of Social Security is taxed at the federal level, then the resident can subtract the amount from the state’s return. In addition, this rule also applies to Tier 1 Railroad Retirement.
Washington
This state is located in the Pacific Northwest region of the United States and is commonly called the 18th largest state. Similar to other American states such as New York, South Dakota, and Nevada, the state of Washington does not have an income tax at all. This implies that all types of income including Social Security and other retirement incomes are completely exempted from state taxation. The reason behind this policy is that the state wants retirees to feel more financially secure and less tax-burdened.
Texas
Texas is a famous state in America which is located in the South Central region of the United States. The state will not levy taxes on Social Security benefits in 2025 because it does not have a state tax regime. This means that Social Security retirement benefits, pension payments, and other forms of retirement benefits are not taxed in the state. Therefore, the tax-free environment of Texas has made it appealing to retirees, as they can now keep their Social Security benefits without any state taxation.
Wisconsin
It is a popular state which is located in the Great Lakes region of the Upper Midwest of the United States. Just like other American states, Wisconsin will not tax the Social Security benefits in 2025. According to Wisconsin’s Department of Revenue, social security benefits and other retirement incomes are not taxable in the state. This exemption is intended to support retirees by allowing them to keep more of their Social Security income in their hands.
