Social Security 2025: States Where Your Benefits won't be taxed
While the federal government may tax these benefits based on income thresholds, several U.S. states offer complete exemptions, allowing retirees to maximize their monthly payments.
As retirees plan their financial future for 2025, one significant consideration is how their Social Security benefits will be taxed at the state level. While the federal government may impose taxes on these benefits under certain income thresholds, several U.S. states offer complete or partial exemptions, allowing retirees to maximize their monthly payments. In this article, we’ll break down the states where Social Security benefits are not taxed and explain why this matters for retirement planning.
States With No Social Security Tax in 2025
As of 2025, nine U.S. states continue their long-standing policy of exempting Social Security benefits from state income taxes. These states are:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Additionally, New Hampshire does not tax Social Security benefits, although it does impose taxes on interest and dividend income.
For retirees, living in these states means that their Social Security income is fully protected from state taxes, providing more financial flexibility and potentially increasing their disposable income.
States With Partial Exemptions or Special Rules
In contrast, some states impose taxes on Social Security benefits but offer partial exemptions or tax benefits based on income thresholds or age. These states include:
- Arkansas
- Illinois
- Iowa
- Mississippi
- Pennsylvania
- South Carolina
For example:
- In Iowa, Social Security benefits are exempt from state taxes for retirees who meet certain income requirements.
- In South Carolina, taxpayers aged 65 and older can claim deductions on their Social Security income.
These policies create a more manageable tax burden for retirees but require a closer look at individual state tax codes to understand the full financial impact.