2026 Social Security State Tax Guide: Only 7 States Still Tax Benefits

Big news for retirees – 43 states now fully exempt Social Security benefits from state taxes in 2026! 

Read: Social Security Payments for January 2026 —Here’s the Full Schedule

West Virginia just joined the tax-free list on January 1, completing its phase-out.

Only 7 states still tax SS benefits, and rates vary by age/marital status.
 

States That Tax Social Security in 2026 (Just 7 Left)

• Connecticut

• Minnesota

• Montana

• New Mexico

• Rhode Island

• Utah

• Vermont

43 states + DC = 0% state tax on Social Security (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming also tax-free).

Federal OBBBA Deduction Boost (2026-2028)

The "One Big Beautiful Bill Act" (OBBBA) adds $6,000 extra deduction ($12,000 couples) for seniors 65+:

Total 2026 Deductions (65+):

• Single: $23,750 total ($15,750 standard + $6,000 OBBBA + $2,000 age)

• Married (both 65+): $46,700 total ($30,000 standard + $12,000 OBBBA + $4,700 age)

Federal SS Tax Thresholds (Unchanged)

IRS "combined income" formula still applies:

Combined Income = AGI + Nontaxable interest + ½ SS benefits

Filing Status | 50% Taxable | 85% Taxable

• Single: $25K-$34K | $34K+

• Married Joint: $32K-$44K | $44K+

State Tax Rates (The 7 States)

1. Connecticut: Up to 6.99% (phasing down)

2. Minnesota: 5.35-9.85% (income-based)

3. Montana: 1-6.75%

4. New Mexico: 1.7-5.9%

5. Rhode Island: 3.75-5.99%

6. Utah: Flat 4.55%

7. Vermont: 3.35-8.75%

Pro Tip: Move to Florida, Texas, or Nevada = instant 100% SS tax exemption + no state income tax.

Check your state: taxfoundation.org/data/all/state/2026-state-income-tax-rates-brackets/ 

2026 Winner: Retirees in tax-free states + OBBBA deduction = maximum SS tax savings. Know your state's rules!

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