Social Security, USA News: Only eight states still tax Social Security benefits, though living in one of these jurisdictions does not automatically mean retirees will have to pay. The remaining states that impose taxes on benefits are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Meanwhile, other states have phased out the levy in recent years, with West Virginia completing its phaseout at the start of 2026.
While these eight states maintain taxes on benefits, middle- and lower-income retirees frequently avoid owing anything due to built-in income exemptions. For instance, New Mexico implements an individual threshold of $100,000, while the threshold for couples rises to $150,000. Because of these rules, retirees are encouraged to review local exemptions before considering relocation.
In addition to state policies, federal taxes on benefits remain a consideration, though a temporary $6,000 senior tax deduction from the One Big Beautiful Bill Act currently shields many recipients. That specific tax break is scheduled to expire in a few years. Average earners whose sole income is Social Security generally avoid taxation, whereas moderate or larger retirement incomes are more likely to trigger taxes at both state and federal levels.
