Understanding which states do not tax Social Security income can be beneficial for financial planning. In conjunction with the cost of living index, this information helps retirees maximize their income and make informed decisions about where to reside.
Alabama
Retirement income in Alabama is lessened since Social Security is not taxed there. The cost of living index in this state is 88.8 and is highly tax friendly. It offers an affordable retirement option that appeals to seniors.
Alaska
Alaska’s lack of state income means Social Security benefits remain untaxed. Despite a higher cost of living index of 124.4, the state’s very high tax friendliness and annual Permanent Fund dividend make it attractive for retirees.
Arizona
Arizona exempts Social Security from state taxes and is phasing out taxes on other retirement income. Its cost of living index of 107.2 and high tax friendliness, combined with warm weather, make it a popular retirement destination.
Arkansas
Arkansas does not tax Social Security benefits and offers tax breaks on other retirement income. With a low cost of living index of 90.3 and high tax friendliness, the state provides an affordable retirement option.
California
California does not tax Social Security, but its high cost of living index of 134.5 and low tax friendliness can offset this benefit. However, the state’s progressive tax system may impact high-income retirees more significantly.
Delaware
Delaware exempts Social Security from state taxes and has no sales tax. Its cost of living index of 102.6 and high tax friendliness, along with relatively low property taxes, contribute to its appeal to retirees.
Florida
Florida’s lack of state income tax means untaxed Social Security benefits. Many people find this state to be highly desirable due to its pleasant weather, high tax friendliness, and the cost of living index of 102.3.
Georgia
Social Security is not taxable in Georgia, and there are deductions available for other retirement income. Its low cost of living index of 91 and high tax friendliness make it an attractive option for budget-conscious seniors.
Hawaii
Hawaii exempts Social Security from state taxes. However, its extremely high cost of living index of 179 and moderate tax friendliness can be a challenge for retirees. The state’s natural beauty may outweigh financial considerations for some.
Idaho
Idaho does not tax Social Security and has a cost index of 106.1. Its high tax friendliness and beautiful natural surroundings make it an appealing option for outdoor-loving retirees.
Illinois
Illinois exempts all Social Security income from state taxes. Despite its moderate tax friendliness and relatively low cost of living index of 90.8, high property taxes can impact overall affordability for seniors.
Indiana
Indiana does not tax Social Security and has a flat income rate. With a low cost of living index of 91.5 and high tax friendliness, the state offers an affordable retirement environment.
Iowa
Iowa is phasing out taxes on all retirement income, including Social Security. Its cost of living of 89.7 and increasing tax friendliness are making the state more attractive to retirees.
Kentucky
Kentucky exempts Social Security from state taxes and offers exclusions for other retirement income. Its low cost of living index of 93.8 and high tax friendliness contribute to its appeal to seniors.
Louisiana
Louisiana does not tax Social Security benefits and has low property taxes. With a cost of living index of 92 and high tax friendliness, the state offers an affordable retirement option with unique cultural attractions.
Maine
Maine exempts Social Security from state taxes and offers some deductions for other retirement income. Despite a high cost of living index of 111.5 and moderate tax friendliness, its natural beauty attracts a lot of people.
Maryland
Maryland does not tax Social Security and offers some pension exclusions as well. Its higher cost of living index of 119.5 is balanced by moderate tax friendliness and proximity to major cities.
Massachusetts
Massachusetts exempts Social Security from state taxes but has a high cost of living index of 148.4. Its moderate tax friendliness and strong healthcare system attract some retirees despite the higher expenses.
Michigan
Michigan does not tax Social Security and offers deductions for other retirement income. With a moderate cost of living index of 92.7 and high tax friendliness, it provides an affordable retirement option.
Mississippi
Mississippi fully exempts Social Security and other retirement income from state taxes. Its low cost of living index of 85.3 and very high tax friendliness make it exceptionally affordable for many individuals, especially retirees.
Missouri
Missouri is phasing out taxes on Social Security for many residents. With a low cost of living index of 88.4 and increasing tax friendliness, the state is becoming more attractive to retirees.
Nebraska
Social Security is no longer subject to taxes in Nebraska. With a moderate cost of living of 90.1, its very high tax friendliness and entertainment options attract many retirees.
Nevada
Nevada’s lack of state income tax means untaxed Social Security benefits. Despite a cost of living index of 101.3, its high tax friendliness and entertainment options appeal to many retirees.
New Hampshire
New Hampshire does not tax earned income of Social Security but does tax dividends and interest. Its cost of living index is 115 is offset by high tax friendliness and no sales tax.
New Jersey
New Jersey exempts Social Security from state taxes and offers some exclusions for other retirement income. However, its cost of living index of 114.1 and moderate tax friendliness are impacted by high property taxes.
New York
New York does not tax Social Security and offers deductions for other retirement income. Its high cost of living index of 125.1 and moderate tax friendliness can be challenging for retirees, especially in urban areas.
North Carolina
North Carolina exempts Social Security from state taxes and has a flat income tax rate. With a cost of living index of 96.1 and high tax friendliness, it offers a balance of affordability and amenities.
North Dakota
North Dakota does not tax Social Security and has a low overall tax burden. Its moderate cost of living index of 94.6 and high tax friendliness, combined with outdoor recreation opportunities, appeal to many retirees.
Ohio
Ohio exempts Social Security from state taxes and offers credits for other retirement income. Its moderate cost of living index of 94 and high tax friendliness make it an affordable option for seniors.
Oklahoma
Oklahoma does not tax Social Security and offers deductions for other retirement income. With a low cost of living index of 86 and high tax friendliness, it provides a feasible retirement option.
Oregon
Oregon exempts Social Security from state taxes but has high-income tax rates on other retirement income. The lack of sales tax combined with the beauty of the state balances the higher cost of living index of 115.1.
Pennsylvania
There is no tax on Social Security in Pennsylvania. With a cost of living index of 99 and very high tax friendliness, it is an attractive option for many retirees.
South Carolina
South Carolina does not tax Social Security and offers generous deductions for other retirement income. Its cost of living index of 96.5 and high tax friendliness, plus a warm climate attract many seniors.
South Dakota
South Dakota’s lack of state income tax means untaxed Social Security benefits. Its low cost of living index of 93.8 and very high tax friendliness, combined with outdoor attractions, appeal to many.
Tennessee
Tennessee has no state income tax, leaving Social Security benefits untaxed. Despite higher sales tax, its low cost of living index of 90.4 and very high tax friendliness are liked by many retirees.
Texas
Texas does not have a state income tax, so Social Security remains untaxed. Its cost of living index of 93 and very tax friendliness are attractive, though property taxes should be considered.
Virginia
Virginia exempts Social Security from state taxes and offers some deductions for other retirement income. With a cost of living index of 103.1 and high tax friendliness, it provides a balanced option for retirees.
Washington
Washington’s lack of state income tax means untaxed Social Security benefits. Despite a cost of living index of 115.1, its very high tax friendliness and natural beauty attract many retirees.
Wisconsin
Wisconsin has phased out taxes on Social Security. With a cost of living index of 95, increasing tax friendliness, and the state’s natural beauty, it is becoming more attractive to retirees.
Wyoming
Wyoming has no state income tax, leaving Social Security untaxed. Its low cost of living index of 92.8 and very high tax friendliness makes it appealing to nature-loving retirees.