Millions of retirees are about to see a clearer divide in how their Social Security benefits are taxed as the 2026 tax year approaches. A new government map divides retirees into two groups. The map highlights which states will tax Social Security benefits and those that will not. This means that retirees will fall into two distinct groups depending on where they live.
This divide has been taken seriously as President Donald Trump’s One Big Beautiful Bill Act is currently under review in the Senate. The bill includes temporary deductions for retirees aged 65 and older of up to $6,000. The bill doesn’t, however, affect state-level taxes, which are one of the most overlooked factors in retirement planning.
Only Nine States Still Tax Benefits in 2026
Only nine states still tax Social Security benefits in some form. These states are: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. However, the number of states will reduce to eight after West Virginia fully phases out its tax on Social Security, following a multi-year gradual repeal.
In the other eight states, tax rules vary widely. Some provide full or partial exemptions depending on income and age. The table below shows how taxes vary in the eight states:
| State | Who Qualifies for Exemption | Tax Treatment |
| Colorado | 65+ (all exempt); Ages 55–64 with AGI under $75k single / $95k joint | Full exemption; partial for higher incomes |
| Connecticut | Under $75k single / $100k joint | Fully exempt; partial (up to 25%) above threshold |
| Minnesota | Under $82,190 single / $105,380 joint | Fully exempt; partial above threshold |
| New Mexico | Under $100k single / $150k joint | Fully exempt |
| Rhode Island | At full retirement age and income under $104,200 single / $130,250 joint | Full exemption; partial if only one spouse qualifies |
| Utah | Up to $54k single / $90k joint | Nonrefundable tax credit |
| Vermont | Under $50k single / $65k joint | Fully exempt; partial up to $60k/$75k |
| Montana | Under $25k single / $32k joint | Fully exempt; up to 85% taxable above limits |
Meanwhile, Montana continues to tax Social Security using the same rules as the federal government, with up to 85% of benefits subject to tax depending on income.
41 States Where Social Security Is Completely Tax-Free
A total of 41 states and Washington D.C. do not tax Social Security benefits. These states are:
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. Kansas
15. Kentucky
16. Louisiana
17. Maine
18. Maryland
19. Massachusetts
20. Michigan
21. Mississippi
22. Missouri
23. Nebraska
24. Nevada
25. New Hampshire
26. New Jersey
27. New York
28. North Carolina
29. North Dakota
30. Ohio
31. Oklahoma
32. Oregon
33. Pennsylvania
34. South Carolina
35. South Dakota
36. Tennessee
37. Texas
38. Virginia
39. Washington
40. Wisconsin
41. Wyoming
+ Washington, D.C.
These states don’t tax Social Security at all while other states have no state income tax. This means retirees can collect their benefits tax-free at the state level.
These include Arkansas, Illinois, Iowa, Mississippi, New Hampshire, Pennsylvania, and South Carolina. Retirees living in these states collect their Social Security benefits and other benefits without worrying about any state tax bill.
There are also nine states that have no state income tax whatsoever. This means that residents in these states don’t pay any state tax on their income. Retirees living there also don’t pay any state taxes on their Social Security or other retirement income. These states are: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
How These Tax Rules Affect Your Retirement
Even if your state doesn’t tax Social Security, you may still owe federal taxes on your benefits. The IRS taxes up to 85% of benefits depending on combined income, which is your adjusted gross income plus half of your Social Security and notable interest. For example, individuals earning more than $34,000 or couples earning over $44,000 annually may owe taxes on a portion of their benefits.
According to Karla Dennis, a tax strategist and CEO of KDA Inc., eliminating taxes on Social Security would be ideal because it would make things easier for retirees. Most seniors don’t expect to owe taxes in retirement.
Conclusion
If Trump’s OBBB passes, retirees could see tax relief at least temporarily. Retirees considering moving states should fast check the new 2026 Social Security tax map.
The U.S. is now divided into two clear groups:
- States that still tax Social Security in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont.
- States that won’t tax it at all: Every other state, including West Virginia, starting in 2026.