Retirees who move for lower taxes usually aim first at states with no income tax at all, but a narrower question matters just as much for anyone already drawing a monthly check: does the state tax the Social Security benefit itself? For most of the country, the answer is no. Eight states still tax Social Security benefits to some degree in 2026, and West Virginia is no longer one of them, having finished a three-year phase-out of its own tax at the start of this year. Even in the eight states that still have the tax on the books, most retirees end up owing nothing once income-based exemptions are applied.
The Eight States Still Taxing Social Security Benefits
Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont are the states that continue to tax Social Security income in some form this year, according to Kiplinger’s state-by-state tracker, last updated August 12, 2026. That is down from a much longer list a decade ago; West Virginia, Kansas, Missouri and Nebraska have each eliminated their Social Security tax in recent years, leaving the remaining eight as the exception rather than the rule. Every one of the eight pairs its tax with an income-based break, so the practical effect on any individual retiree depends heavily on filing status and adjusted gross income, not just the state listed on a map.
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West Virginia’s Three-Year Phase-Out Finishes This Year
West Virginia’s exit from this list did not happen all at once. Under a modification the state West Virginia Tax Division describes on its own site, taxpayers above the state’s existing $50,000 (or $100,000 for joint filers) income threshold saw a 35 percent reduction of their taxable Social Security income starting in tax year 2024, rising to 65 percent for tax year 2025, and reaching a full 100 percent decreasing modification for tax year 2026. Retirees below that income threshold had already owed nothing on their Social Security since tax year 2022. The upshot is that West Virginia’s Social Security tax, for every filer regardless of income, effectively ended with the start of the current tax year, even though the last of the old, partially taxed returns won’t be filed until early 2026 for the 2025 tax year.
Why Colorado, Utah and the Others Still Collect Something
Colorado taxes Social Security benefits on paper, but the practical bite is narrow. The Colorado Department of Revenue’s own retiree guidance confirms that taxpayers 65 and older may subtract the full amount of Social Security benefits included in their federal taxable income, beyond the standard pension and annuity cap that applies to younger retirees. Kiplinger’s tracking of the state’s 2026 rules adds that retirees aged 55 to 64 can also deduct up to $95,000 (married filing jointly) or $75,000 (single) of Social Security income, with a smaller deduction available above those thresholds. Utah takes a different approach, applying its tax but then offering a Social Security benefits credit calculated on a state worksheet, layered against a flat 4.45 percent tax rate on all taxable income. In both states, a retiree relying mainly on Social Security and modest savings is unlikely to owe anything, while a retiree with substantial pension or investment income on top of Social Security is more likely to see a real bill.
Connecticut, Minnesota and Vermont Set the Bar at Household Income
The remaining states in the group set their exemptions around household adjusted gross income rather than age alone. Connecticut exempts Social Security entirely for single filers below $75,000 in AGI and joint filers below $100,000, and even above that line caps the taxable share at 25 percent of benefits. Minnesota ties its exemption to a sliding subtraction that phases out gradually above roughly $84,490 for single filers and $108,320 for joint filers, rather than cutting off all at once. Vermont allows a full exemption for joint filers with AGI at or below $80,000 and single filers at or below $65,000, with a partial exemption stretching up to $94,999 for joint filers. New Mexico and Rhode Island follow the same shape with their own thresholds, both set high enough that Kiplinger describes most retirees in those states as unlikely to pay the tax at tax time despite technically being subject to it. Montana is the outlier with the least generous treatment: retirees 65 and older there receive only a $5,500 subtraction from federal taxable income, a smaller break than any of the other seven states offer.
A Shrinking List, Not a Frozen One
The trend across the past several years has run in one direction: states dropping the Social Security tax entirely rather than adding new exemptions to keep it. West Virginia’s phase-out followed Kansas, Missouri and Nebraska doing the same in prior years, part of a broader wave of state tax changes aimed specifically at retirees living on fixed benefit income. None of the eight states still taxing Social Security has announced a similar full phase-out for 2027, but several, including Colorado’s removal of its dollar cap on the separate pension subtraction starting this tax year, have moved incrementally to narrow how much any given retiree actually pays. For a retiree weighing a move, or simply trying to plan next April’s return, the state listed on this year’s map matters less than the specific income threshold sitting inside it.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
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The 2026 payment calendar, the three SSA forms that stop or pause collection, and a first-24-hours plan for a payment that never arrives.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
