States That Tax Social Security Benefits in 2027
The 8 taxing states at a glance
| State | Rule in one line |
|---|---|
| Colorado | Age-based subtraction — nothing owed at 65+ |
| Connecticut | Exempt below $75k / $100k AGI |
| Minnesota | Subtraction that phases out with income |
| Montana | Follows the federal taxable amount |
| New Mexico | Exempt below $100k / $150k AGI |
| Rhode Island | Exempt at full retirement age below the AGI caps |
| Utah | Taxed, but offset by a benefits credit |
| Vermont | Exempt below $55k / $70k AGI, partial above |
Thresholds are the most recently published figures as of October 2026; several states adjust them for inflation each year. Always confirm your filing-year numbers with the state revenue agency.
Each state's rule in detail
Colorado
Colorado lets taxpayers aged 65 and over subtract 100% of their federally taxable Social Security benefits, so most retirees owe no state tax on benefits at all. Taxpayers aged 55–64 can also subtract benefits, within the retirement-income subtraction caps of $75,000 (single) / $95,000 (joint).
Connecticut
Connecticut fully exempts benefits when AGI is below $75,000 (single) / $100,000 (joint). Above those thresholds the exemption phases down, and no more than 25% of benefits are ever taxed.
Minnesota
Minnesota's subtraction exempts benefits in full for AGI up to $84,490 (single) / $108,320 (joint) — the most recently published thresholds, adjusted annually — and phases out as income rises above them, so higher-income filers are taxed on part of their benefits.
Montana
Montana taxes the federally taxable portion of your benefits: it starts from the federal calculation and offers no Social Security-specific exemption. Some filers can offset other income with Montana's retirement-income deductions, so check the Montana DOR rules for your situation.
New Mexico
New Mexico exempts benefits for AGI up to $100,000 (single) / $150,000 (joint) — which covers most New Mexico retirees (the state estimates about 86% of seniors). Above the caps, the federally taxable portion is taxed.
Rhode Island
Rhode Island exempts benefits once you have reached full retirement age, provided your AGI is below $107,000 (single) / $133,750 (joint) — the latest published thresholds, which are adjusted for inflation each year. Above them, the federally taxable portion is taxed.
Utah
Utah taxes benefits, but a nonrefundable Social Security benefits credit offsets the tax for many filers and phases out as income rises. Taxpayers born on or before December 31, 1952 may instead qualify for a separate $450 retirement credit — the two credits cannot both be claimed.
Vermont
Vermont fully exempts benefits at AGI up to $55,000 (single) / $70,000 (joint), gives a partial exemption in the band just above ($55,000–$65,000 / $70,000–$80,000), and applies the federal treatment above that.
The states that just stopped
The trend runs one way. West Virginia completed its phase-out with a 100% subtraction from tax year 2026 — returns filed in 2027 are the first with no West Virginia tax on benefits. Kansas replaced its income-tested rule with a full exemption in 2025, and the Missouri and Nebraska phase-outs also finished in 2025. If a list you find still shows 9, 12 or 13 taxing states, it predates these changes.
Don't confuse state tax with federal tax
Federally, up to 85% of your benefits can be taxable depending on your combined income (thresholds $25,000/$34,000 single, $32,000/$44,000 joint — not inflation-indexed). That applies in all 50 states. The eight states above are the only ones that add a state layer on top, and each softens it with the exemptions described here. Your own state's full picture — average benefit, SSI supplement and tax rule together — is on its page in the by-state index.
Frequently asked questions
Which states tax Social Security benefits in 2027?
Eight: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. The other 42 states and the District of Columbia fully exempt benefits — including nine states with no broad income tax at all (AK, FL, NV, NH, SD, TN, TX, WA, WY).
Do these states tax the whole benefit?
No. Every one of the eight starts from the federally taxable portion (at most 85% of your benefit) and then applies its own exemption, subtraction or credit. In practice most retirees in these states pay little or nothing: Connecticut, New Mexico and Rhode Island exempt everyone under six-figure income caps, Colorado exempts everyone 65+, and Vermont exempts everyone under $55,000/$70,000 AGI.
Did any state stop taxing benefits recently?
Yes — the list keeps shrinking. Kansas, Missouri and Nebraska finished phasing out their taxes in 2025, and West Virginia's phase-out completed for tax year 2026, which is why most older lists (which show 9–13 states) are out of date.
Is the COLA itself taxed separately?
No. There is no separate tax on the adjustment — the increase is simply part of your benefit. If your benefits are taxable in your state (or federally), the larger amount is taxed the same way as the rest of the check.
If I move to a non-taxing state, does my state tax stop?
State taxation follows residency: benefits received while you are a resident of a non-taxing state are not taxed by your old state. Part-year residents file part-year returns. Your federal benefit itself never changes when you move — it is computed federally and fully portable.
Where can I verify my state's current rule?
Your state department of revenue publishes the current-year forms and instructions; the thresholds on this page are the most recently published ones as of October 2026 and several are adjusted for inflation annually, so confirm the figures for your filing year before you file.
Sources: state departments of revenue rules and forms for the most recent tax year; cross-checked against published 2026 state-by-state summaries (Money, Motley Fool) in October 2026. This page is general information, not tax advice.