Which states still tax Social Security benefits in 2026 and what are their income thresholds?
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Executive summary
Eight states still impose some level of state income tax on Social Security benefits for tax year 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont, though the precise treatment and income thresholds vary widely and many low‑ and middle‑income retirees are shielded by exemptions or credits [1] [2] [3]. Reporting is consistent that West Virginia completes a phase‑out in 2026 and will no longer tax benefits beginning with that tax year, a detail that creates some divergence in headline counts across outlets [4] [5] [6].
1. The short list — which states still tax benefits in 2026
Multiple contemporary guides and state‑by‑state roundups converge on the same eight states that will still tax at least some Social Security income in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont [1] [3] [7]. Some sources and older summaries also mention a ninth jurisdiction in transition—West Virginia—but federal‑and‑state law changes scheduled for 2026 complete a phase‑out there, so many 2026 summaries drop WV from the taxable list [4] [5] [6].
2. What “taxing Social Security” actually means in these states
“Taxed” does not mean an across‑the‑board levy on every retiree; most of the eight states use formulas, subtractions, credits or income thresholds that exempt low‑ and middle‑income beneficiaries and only subject higher combined incomes to tax [2] [1]. Several states follow or allow the federal taxable‑benefits concept as a starting point and then layer state‑specific subtractions or phaseouts on top of that federal calculation [8] [2].
3. The clearest thresholds available from reporting (state by state)
Available reporting provides specific thresholds for some states but not all: Vermont allows a full exemption for many retirees — a full exemption for AGI below $50,000 ($65,000 joint) and partial exemptions that phase out up to $60,000 ($75,000 joint), with benefits taxable above those levels [2]. Rhode Island’s reported exemption for residents at or above full retirement age applies when AGI is below $104,200 ($133,250 joint), with partial taxation above those thresholds [2]. Colorado’s filing guidance shows age‑based rules: under‑65 filers can exclude up to $20,000 of federally taxable Social Security benefits, and a staged expansion lets ages 55–64 exclude more if AGI is below reported thresholds ($75,000 single / $95,000 joint for expanded relief in 2025 forward), with different treatment above those limits [6]. Utah assesses benefits under its flat income tax but offers a nonrefundable Social Security Benefits Credit that phases out based on MAGI and can substantially reduce or eliminate state tax for many retirees [5]. New Mexico and Connecticut are frequently described as taxing benefits but protecting many retirees with higher exemption thresholds or partial deductions; New Mexico’s thresholds are relatively generous so many retirees pay little or no state tax [3] [1]. Montana, Minnesota and Connecticut apply state‑specific formulas or subtractions often tied to age and income; Minnesota’s complex subtraction rules have been changing and some legislative features shifted thresholds in recent years [3] [8].
4. Where reporting is thin and why the numbers wobble
Public guides differ on whether the count is eight or nine because West Virginia completes a phase‑out in 2026 and because states publish differing age‑ and income‑tier rules that reporters summarize differently [4] [5] [8]. Not every source supplies precise, up‑to‑the‑penny AGI thresholds for every state in one place; for some jurisdictions the reporting gives only qualitative descriptions (e.g., “generous thresholds” or “partial exemptions”) rather than a single universal cutoff, and Minnesota’s subtraction mechanics have been in flux [1] [3] [8].
5. Bottom line for retirees and planners
The practical reality is that most states do not tax Social Security at all in 2026 — 41 states are reported to exempt benefits — while the handful that do apply protections so that primarily higher‑income households are affected; however, the exact AGI cutoffs and phaseouts differ by state and by taxpayer age, and West Virginia’s phase‑out in 2026 further complicates headline counts [2] [4] [1]. For anyone trying to quantify exposure, the only sound next step is to consult the latest state tax instructions or a tax professional for the specific 2026 subtraction/credit formulas that apply in the state of residence (reporting sources provide examples and thresholds but do not uniformly list every state’s final 2026 numeric cutoff) [2] [6] [8].