The Geography of Retirement: Which US States Let You Keep Your Social Security

Your zip code matters more than you think when it comes to Social Security. While the federal government might take up to 85% of your benefits through taxation depending on income levels, state governments create an additional layer of complexity — and in 41 states across the US, you’ll face zero state income tax on Social Security benefits.

A Shrinking List of States Taking Social Security Taxes

Only nine states still tax Social Security benefits in 2025, down from previous years as more states recognize the burden on retirees:

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

This number dropped further when Kansas, Missouri, and Nebraska eliminated their Social Security taxes in 2024, signaling a national trend toward protecting retirement income.

41 States Won’t Touch Your Social Security Benefits

The majority of the US protects Social Security from state taxation. These 41 states plus Washington, D.C. include:

Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, 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, and Washington, D.C.

What’s Your Tax Savings Actually Worth?

The financial impact varies by state and individual circumstances. To calculate your potential savings, multiply your effective state tax rate by your total annual Social Security benefits. If you pay 5% in state taxes and receive $30,000 annually in benefits, that’s $1,500 staying in your pocket rather than going to state revenue.

Real-world examples show significant collective savings: Missouri retirees save approximately $309 million annually through non-taxation, while Nebraska retirees retain around $17 million yearly. These figures highlight how state policy directly affects retirement security.

The Caveat: Age and Income Matter

Even in states that do tax Social Security, exemptions often exist. Colorado residents aged 65 and older have fully deducted federally-taxed Social Security benefits since 2022. In 2025, this expands to ages 55-64 with adjusted gross income capped at $75,000 for individuals or $95,000 for married couples filing jointly.

Meanwhile, West Virginia is phasing out Social Security taxation entirely, with complete exemption starting in 2026.

Strategic Considerations for Retirement Planning

Understanding your state’s approach to Social Security taxation deserves attention during retirement planning. The difference between states can amount to thousands of dollars annually for beneficiaries. With 41 states in the US offering full protection and only nine maintaining taxation, geographic advantage has become a legitimate retirement consideration for those with flexibility in relocation decisions.