Which States Will Not Tax Social Security Benefits in 2025?

Which States Are Exempting Social Security Benefits from Taxes in 2025?

In the upcoming year, 15 states across the United States will continue to offer tax relief to retirees by exempting Social Security benefits from state income tax. As more individuals retire and rely on Social Security as their primary income, it’s important to understand where you can keep more of your benefits in your pocket. For the 2025 tax year, these states will allow seniors to avoid state income taxes on their Social Security checks, helping to stretch their retirement funds further.

What Does It Mean to Not Tax Social Security Benefits?

When a state does not tax Social Security benefits, it means that any payments received from the Social Security Administration (SSA) will be free from additional state income tax. This can be a significant financial advantage for retirees, who often rely heavily on Social Security as a primary source of income.

It’s important to note that Social Security taxes still apply at the federal level, but these states are offering a break on the state income tax portion, which can result in substantial savings for retirees.

15 States That Will Not Tax Social Security Benefits in 2025

The following 15 states are set to exempt Social Security benefits from state income taxes in 2025:

  1. Alaska – Known for its lack of a state income tax, Alaska does not tax Social Security benefits or any other retirement income.
  2. Florida – Another popular state for retirees, Florida has no state income tax, ensuring Social Security benefits are not taxed.
  3. Georgia – While Georgia does tax income, it does not tax Social Security benefits for most seniors.
  4. Hawaii – Social Security benefits are not subject to state income taxes in Hawaii, though there are income thresholds that may apply.
  5. Idaho – Social Security benefits are exempt from taxation in Idaho, but other retirement income may be taxed depending on the individual’s total income.
  6. Illinois – Illinois is known for not taxing Social Security benefits, providing relief to retirees on fixed incomes.
  7. Indiana – Like Illinois, Indiana also exempts Social Security benefits from state income tax.
  8. Kentucky – Kentucky offers tax relief on Social Security benefits for retirees, keeping these payments free from state income tax.
  9. Louisiana – Social Security benefits are exempt from income tax in Louisiana, offering a significant advantage to seniors in the state.
  10. Maine – Maine does not tax Social Security benefits, but there may be income limitations for eligibility.
  11. Maryland – Maryland exempts Social Security benefits from taxation for retirees, though some exceptions may apply for higher-income individuals.
  12. Mississippi – Social Security benefits are not taxed in Mississippi, helping retirees keep more of their benefits.
  13. Nevada – Nevada does not have a state income tax, meaning Social Security benefits are not taxed.
  14. New Hampshire – New Hampshire offers a favorable tax environment by not taxing Social Security benefits.
  15. Tennessee – Known for its lack of a state income tax, Tennessee also does not tax Social Security benefits, making it a popular destination for retirees.

Key Considerations for Retirees

While the absence of state income taxes on Social Security benefits is a big plus, it’s important for retirees to keep in mind that each state has its own unique tax laws and exemptions. For example, some states may still tax other types of retirement income, such as pensions, 401(k) withdrawals, or IRA distributions. Therefore, it’s essential for retirees to evaluate their entire income situation when considering relocation.

Additionally, some states impose income limits or age restrictions to qualify for exemptions. For instance, in Maine, retirees over the age of 65 may qualify for a tax break, while in Maryland, the exemptions are based on income thresholds.

Why Some States Don’t Tax Social Security Benefits

States that don’t tax Social Security benefits typically do so to make themselves more attractive to retirees. With an aging population, many states are striving to create favorable tax environments for older residents to help draw retirees and encourage them to spend and invest within the state.

These tax incentives can provide a much-needed boost to the finances of retirees who may otherwise be struggling with cost-of-living increases or other financial pressures. Additionally, states without an income tax, like Florida and Texas, are already drawing attention due to the financial freedom they offer to residents.

Conclusion: States Offering Tax Relief for Social Security Benefits

As more retirees look for states that offer the best financial advantages, tax relief on Social Security benefits is a crucial factor to consider. In 2025, these 15 states will continue to offer relief to seniors by exempting Social Security from state taxes, helping retirees keep more of their hard-earned benefits. If you’re planning to relocate or simply want to ensure that you’re taking full advantage of these opportunities, it’s a good idea to carefully research each state’s tax laws and take advantage of these benefits.

For more information on tax relief for retirees, visit the Social Security Administration’s website.

Disclaimer – Our team has carefully fact-checked this article to make sure it’s accurate and free from any misinformation. We’re dedicated to keeping our content honest and reliable for our readers.

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