Which states still tax Social Security benefits in 2026?

Most states do not tax Social Security benefits at all. Only eight can still tax some portion of the benefit in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont, and each one applies its own income cutoff, credit or phase-out.

Which states recently stopped taxing Social Security?

Kansas and West Virginia dropped off that list in the last two years. Kansas removed its $75,000 income cap starting with tax year 2024 and now exempts Social Security for every taxpayer regardless of income. West Virginia finished a three-year phase-out of its own; the deduction reached 100% for tax year 2026, so Social Security is now fully exempt there too.

How do Colorado and Connecticut tax Social Security?

In Colorado, corporate retirees age 65 or older can subtract their full Social Security benefit from state taxable income with no dollar cap, a rule in place since tax year 2022. Those 55 to 64 get the same full subtraction if income stays under $75,000 single or $95,000 joint. Connecticut exempts Social Security entirely below $75,000 of federal adjusted gross income for single filers or $100,000 for joint filers; above those lines, Connecticut taxes no more than 25% of the amount received.

How do Minnesota, Montana, New Mexico and Rhode Island tax Social Security?

Minnesota's 2026 subtraction covers the full benefit up to $86,410 of adjusted gross income for single filers or $110,780 for joint filers, phasing down 10% for every $4,000 of income above that. Montana is the outlier among the eight: it has no separate Social Security subtraction or credit, so corporate retirees there pay state tax on whatever portion already counts as taxable at the federal level. New Mexico and Rhode Island both use an all-or-nothing income cap instead of a phase-out. New Mexico exempts Social Security fully under $100,000 single or $150,000 joint income, with no partial break above those caps. Rhode Island also requires reaching Social Security full retirement age, in addition to staying under $107,000 single or $133,750 joint income, the tax year 2025 limits that the state adjusts for inflation each year.

How do Utah and Vermont tax Social Security?

Utah taxes the benefit but offsets it with a nonrefundable credit equal to the taxable Social Security amount multiplied by the state's flat rate, 4.45% for tax year 2026. That credit shrinks by $0.025 for every dollar of income above $54,000 single or $90,000 joint, so higher earners keep a smaller offset. Vermont runs on a similar sliding scale: Social Security is fully exempt up to $55,000 single or $70,000 joint income, phases out through $65,000 and $80,000, and gets no exemption above those points.

How does the federal government tax Social Security benefits?

Federal tax uses a separate test built on combined income: adjusted gross income not counting Social Security, plus tax-exempt interest such as municipal bond income, plus half of the Social Security benefit received that year. Below $25,000 of combined income for a single filer, or $32,000 for a married couple filing jointly, Social Security stays untaxed at the federal level. Between $25,000 and $34,000 single, or $32,000 and $44,000 joint, up to 50% can be taxed. Above those upper thresholds, up to 85% can be taxed. These dollar figures are set in the statute and have not moved for 2026.

What does a corrected combined-income example look like?

Take a single filer with $50,000 in adjusted gross income not counting Social Security, $24,000 in annual Social Security benefits, and $500 in tax-exempt interest from municipal bonds. Half of the Social Security benefit is $12,000, so combined income works out to $62,500: $50,000 plus $500 plus $12,000. That total sits well above the $34,000 upper threshold, so up to 85% of the Social Security benefit can be federally taxable for this filer.

Does the new senior deduction change how Social Security is taxed?

A separate federal deduction created in 2025 lets taxpayers 65 and older subtract up to $6,000 each, or $12,000 on a joint return, for tax years 2025 through 2028. It phases out above $75,000 of modified adjusted gross income for single filers and $150,000 for joint filers. The deduction lowers overall taxable income; it does not exempt Social Security benefits themselves from tax.

Was the Windfall Elimination Provision repealed?

Yes. The Social Security Fairness Act, signed January 5, 2025, repealed both the Windfall Elimination Provision and the Government Pension Offset for benefits payable after December 2023. For corporate retirees who also draw a pension from work not covered by Social Security, often a public-sector job, Social Security no longer gets reduced for that reason. The Social Security Administration has already issued more than 3.1 million retroactive payments to people affected by the old rules.

What about pension and 401(k) income in retirement?

State tax rules for pension payouts and 401(k) withdrawals are set separately from the Social Security rules above. A state that exempts Social Security is not required to exempt a pension or retirement-account distribution, and the reverse is also true. For corporate retirees, each income source is worth checking on its own; one state's answer for Social Security does not predict its answer for a pension or a 401(k).