# 8 States Where Social Security Income Remains Untaxed Key states retirees should consider for maximizing Social Security benefits. - **Source:** [SavingAdvice.com Blog](https://brifing.si/source/0a5be9fd-36c9-42ed-8bc4-90f6e843d3b4) - **Published:** 2026-09-20 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/f91a8463-6524-463c-8704-127928994e3e ## West Virginia's tax phaseout West Virginia completed a three-year phaseout of state taxes on Social Security benefits in 2026, now offering a 100% modification for all income levels. Previously, higher-income taxpayers saw partial modifications (35% in 2024, 65% in 2025). Lower-income filers (AGI ≤$50k individual/$100k joint) already qualified for full exemptions. This change removes West Virginia from the list of states taxing Social Security, though federal taxation still applies regardless of residence. ## Florida's no-income-tax advantage Florida imposes no state income tax on any earnings, making Social Security benefits automatically tax-free. This applies equally to all benefit amounts and extends to pensions, retirement account withdrawals, and other taxable income sources. However, retirees must weigh this against Florida's property taxes, insurance costs, and living expenses. The absence of income tax simplifies retirement planning but doesn't guarantee lower overall costs compared to states with income taxes but cheaper housing. ## Nevada's simplified tax structure Like Florida, Nevada lacks a state income tax, eliminating any taxation of Social Security benefits. This applies uniformly regardless of benefit size or additional retirement income sources like IRA withdrawals. Nevada funds government services through sales taxes (6.85% base rate), property taxes (avg 0.60%), and gaming revenues. Retirees avoid complex benefit calculations but should evaluate total tax burden, as high sales taxes may offset income tax savings for those with substantial discretionary spending. ## Pennsylvania's selective exemptions Pennsylvania taxes personal income but specifically excludes Social Security benefits, creating a hybrid approach. While wages earned during retirement remain taxable, Social Security checks avoid state taxation entirely. The state's flat 3.07% income tax applies to pensions and retirement account withdrawals, making benefit exemptions particularly valuable for those heavily reliant on Social Security. This contrasts with states that tax benefits but offer lower rates on other retirement income. ## North Carolina's benefit protection North Carolina taxes individual income but explicitly exempts Social Security benefits, unlike eight states that still impose partial taxation. This benefits retirees whose Social Security constitutes most of their income, though traditional IRA/401(k) withdrawals remain taxable. The state's 4.75% flat income tax rate makes the exemption impactful, but property taxes (avg 0.86%) and sales taxes (4.75% state + local) require holistic budget analysis beyond Social Security treatment. ## Texas's trade-offs for retirees Texas joins no-income-tax states, eliminating Social Security taxation along with taxes on pensions and retirement account withdrawals. For retirees with multiple income streams, this simplifies planning significantly. However, Texas compensates with higher property taxes (avg 1.69%, sixth-highest nationally) and no state income tax deduction for federal taxes paid. The Homestead Exemption offers limited relief (up to $40k deduction) for primary residences, but overall costs may rival high-tax states. ## Illinois's targeted exemptions Illinois maintains a state income tax (4.95%) but excludes Social Security and certain retirement income, creating a middle ground. Federally taxed benefits can be subtracted from Illinois taxable income, along with qualifying pension/IRA distributions. This structure benefits retirees with mixed income sources, though property taxes (avg 2.08%, second-highest nationally) offset some advantages. The exemption approach demonstrates that income-taxing states can still offer favorable Social Security treatment. ## Holistic relocation calculus Only eight states (CO, CT, MN, MT, NM, RI, UT, VT) may still tax Social Security in 2026, often with income-based exemptions. West Virginia's recent phaseout leaves 42 states fully exempt. Retirees should compare all costs: property taxes (avg 0.91-2.21% in no-income-tax states), sales taxes (up to 9.55% with local additions), and insurance premiums. Federal taxation (up to 85% of benefits taxable above $34k individual/$44k joint AGI) applies everywhere, making state-level savings one component of retirement planning. ## Sources covering this story - https://www.savingadvice.com/articles/2026/09/20/10747445_8-states-where-retirees-keep-more-of-their-social-security-income.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._