Which States Still Impose Taxes on Social Security Income in 2025?

Social Security taxation remains a patchwork issue across America, with nine states continuing to levy taxes on retirement benefits despite a growing national movement to eliminate this practice. As West Virginia phases out its burden and Kansas has already eliminated theirs, the remaining states that tax Social Security benefits represent an increasingly rare policy holdout—though the landscape is rapidly shifting.

The National Push to End Social Security Taxation

A significant trend has emerged over recent years: states are reconsidering whether they should tax benefits that retirees have already earned. Advocates argue that these state-level taxes unfairly reduce retirement income and disproportionately impact older adults struggling with rising living costs. After substantial inflation in recent years, many beneficiaries are reconsidering retirement itself, with nearly a third of retirees contemplating a return to the workforce.

At the federal level, President Trump has pledged to eliminate federal Social Security taxation—a move that would affect roughly 40% of the nation’s 70 million benefit recipients. However, congressional action remains uncertain, whereas states maintain independent taxing authority.

Nine States Where Social Security Remains Taxable

Utah represents a state in transition. Households earning above $90,000 currently face Social Security taxation at the state’s 4.55% rate, though tax credits offset this burden for lower-income filers. Governor Spencer Cox has championed eliminating the tax entirely, calling it his “most popular proposal in years,” potentially saving qualifying households nearly $1,000 annually. While the 2025 budget didn’t authorize complete elimination, lawmakers did increase the exemption threshold from $75,000 to $90,000.

Minnesota imposes taxes on higher-income beneficiaries, with joint filers facing taxes if income exceeds $108,320 (single filers: $84,490). Growing legislative support exists for eliminating all taxation on benefits within the state.

Colorado applies its 4.4% state income tax selectively to Social Security. Individuals 65 and older typically receive deductions, as do taxpayers aged 55-64 earning below specified thresholds. Younger beneficiaries may owe taxes on their benefits.

Montana taxes Social Security for married couples with income over $32,000 or individuals exceeding $25,000, though deductions are available for higher earners. A 2023 legislative effort to end this taxation failed.

Vermont generally exempts taxpayers earning under $50,000 (couples: $65,000) from Social Security taxation. However, tax liability escalates for higher earners, becoming fully effective for individuals earning above $60,000 or couples over $75,000. Over 60 state lawmakers, spanning both parties, are actively pushing to raise these thresholds.

Rhode Island spares retirees who’ve reached full retirement age and maintain income below $104,200 (as of 2024). Others face income taxes ranging from 3.75% to 5.99% on their benefits.

New Mexico provides substantial relief through 2022 legislation permitting single residents earning under $100,000 and married couples earning under $150,000 to fully deduct Social Security from taxable income. Those above these thresholds face income tax rates from 1.7% to 5.9%.

Connecticut only taxes Social Security when adjusted gross income surpasses $75,000 for individuals or $100,000 for couples, with 75% of benefits remaining exempt even then.

States Phasing Out or Recently Eliminating Taxes

West Virginia is transitioning out of Social Security taxation. Higher-income beneficiaries have already experienced a 65% tax reduction under recent legislation, with complete elimination scheduled by 2026.

The Broader Context

The movement to reduce or eliminate Social Security taxes on state levels reflects growing recognition that these levies place undue hardship on fixed-income retirees. As more states abandon this practice, the remaining jurisdictions that tax Social Security benefits increasingly stand apart from national policy trends. The question now is whether other states will follow suit or maintain their current taxation approach.