For many retirees, Social Security isn’t just a benefit—it’s a financial lifeline. And depending on where you live, how much of that money you actually keep can vary quite a bit. While federal taxes can take a chunk out of your benefits if your income is high enough, some states go a step further by taxing your Social Security income as well. Fortunately, in 2025, the list of states doing this is shrinking, making retirement a little easier for millions of Americans.
With Missouri, Nebraska, and Kansas stepping back from taxing Social Security, only nine states will continue this practice in 2025. That means 41 states, along with Washington, D.C., will not tax Social Security benefits at all. This shift could mean hundreds or even thousands of dollars in savings each year for retirees. But it’s still crucial to understand how each state’s tax rules apply—some offer exemptions or deductions based on income or age.
States Won’t Tax Social Security in 2025
For retirees across the United States, Social Security is more than just a monthly check—it’s a major source of income. According to AARP, around 40% of Americans aged 65 and older rely on Social Security for at least half of their income. But while those benefits offer financial stability, taxes can chip away at what you take home, especially depending on where you live.
At the federal level, up to 85% of your Social Security benefits could be taxed, based on your total income. On top of that, a few states still impose their own income taxes on Social Security. But there’s good news: that number is going down. In 2025, only nine states will tax Social Security, thanks to recent legislative changes.
States like Missouri and Nebraska have dropped their Social Security taxes as of 2024, with Kansas following suit later the same year. That’s a significant shift, reducing the number of states that still tax these benefits to just nine: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. And even in West Virginia, the tax is on its way out, set to disappear completely by 2026.
Each of these nine states has its own unique tax rules. Some offer deductions or exemptions based on income level or age, so not every retiree will face the full brunt of the tax. For instance, Colorado has allowed full deductions of federally taxed Social Security benefits for residents over 65 since 2022. Starting in 2025, this benefit will extend to those aged 55 to 64, as long as their income falls under $75,000 (or $95,000 for couples filing jointly).
For everyone else, there’s some real relief: 41 states and Washington, D.C., will not tax your Social Security benefits at all in 2025. This includes states like Florida, Texas, California, and many others where you won’t see a dime of your Social Security check going to state income tax.
If you’re wondering how much money this actually saves you, the math is pretty straightforward. Financial advisor Brian Kuhn suggests looking at your effective state income tax rate and applying it to your annual Social Security income. For example, if your state tax rate was 5% and you receive $30,000 a year in Social Security benefits, you’d save $1,500 by living in a state that doesn’t tax those benefits.
And the collective savings are impressive. In Missouri, the shift is expected to leave around $309 million more in retirees’ hands each year. In Nebraska, it’s about $17 million. That’s not just good news—it’s life-changing for many.
While these state-level changes make a big difference, it’s still smart to understand how your specific state handles retirement income and Social Security taxes. Some states might offer partial exemptions or income thresholds that affect whether and how much you pay.
So, as you think about retirement—whether it’s around the corner or still years away—where you live could have a big impact on how far your benefits go. With most of the country now skipping Social Security taxes altogether, retirees have more choices than ever when it comes to keeping more of their hard-earned benefits.
