Many Americans worry about how their retirement income will be taxed, especially regarding Social Security benefits. These monthly Social Security payments are the backbone of millions of seniors’ retirement finances.
If your total retirement income is high enough, some Social Security income may be taxable at the federal level, but where you live also matters.
As of 2025, 19 states do not tax Social Security benefits. Retiring in one of these places can make life much more affordable, letting retirees keep more of their hard-earned money for essentials, healthcare, travel, or family.
States that don’t tax Social Security often see more retirees move in, and their policies can directly improve financial security and quality of life for people living on fixed incomes.
1. Alabama
Alabama is well known for being one of the most generous states in terms of taxes for retirees.
All Social Security retirement benefits are entirely exempt from state income tax in Alabama, so what retirees receive from the Social Security Administration goes into their pockets.
The state also shields certain other types of retirement income and offers property tax breaks to qualifying seniors.
Add in generally mild winters, affordable living costs, and access to great outdoor activities, and it’s easy to see why Alabama is a popular choice for those looking to make their income last as long as possible.
2. Alaska
Alaska stands out for retirees looking to maximize their net retirement income, even beyond Social Security. Alaska does not have any state income tax for anyone.
No matter your income, they are free from Alaska state tax. Alaska’s government even gives every eligible resident an annual dividend payment from oil revenue, which can add to your yearly income.
However, Alaska’s high cost of living, remote location, and extreme winters may not fit everyone’s lifestyle, so it pays to weigh these factors before moving.
3. Arizona
Arizona has long been famous among retirees for its sunny weather, scenic desert landscapes, and robust retirement communities.
From a tax standpoint, it’s equally attractive: Arizona fully exempts Social Security benefits from state income tax, which lets seniors keep the full amount of their checks.
However, public and private pension income may still be subject to state tax, so it’s a good idea to look closely at your complete retirement income picture.
Arizona’s health care resources, active senior centers, and popular cultural events add to its appeal for those seeking both tax relief and a fulfilling retirement lifestyle.
4. Arkansas
Arkansas provides real tax relief for retirees by not taxing Social Security income. This policy can especially help seniors facing rising housing, utilities, and healthcare costs.
The state also provides partial exemptions on private pensions and other types of retirement income, which means retirees have more flexibility in managing their finances.
Combined with its very low cost of living, Arkansas can be an excellent home base for retirees who want maximum buying power and a limited income. Beautiful lakes, forests, and small towns add lifestyle benefits as well.
5. California
Despite having some of the country’s highest income and property taxes, California does not tax Social Security retirement benefits at all.
This means seniors keep every dollar of their monthly payments, which is a big help in a state known for high prices, especially for real estate and healthcare.
Other types of retirement income, such as distributions from pensions, 401(k), or IRAs, may still face state tax here, so careful planning is key.
Many retirees choose California for its scenic coastlines, major cities, diverse cultural activities, and access to some of the best medical facilities in the world.
6. Delaware
Delaware is often listed among the most tax-friendly states for retirees, not just because Social Security is exempt, but also because the state has no sales tax and moderate property taxes.
Delaware’s government has worked to create a retiree-focused tax code, including offering exclusions on some pension incomes and other retirement savings.
Its compact size means wherever you live, you’re never far from beaches, parks, historic sites, or quality medical care.
These policies help make Delaware an excellent choice for retirees who want a low-tax environment without sacrificing access to amenities.
7. Florida
Florida is famous as a top destination for retirees nationwide. It has no state income tax at all.
That means Social Security, most pensions, retirement account withdrawals, and even part-time working income are completely untaxed by the state. This lets retirees keep their income for living expenses, recreation, or family.
Year-round warm weather, thousands of retirement-friendly towns, recreational options from beaches to golf, and no snow to shovel contribute to Florida’s popularity.
However, housing costs have risen, and hurricane season is an ongoing consideration.
8. Georgia
In Georgia, Social Security payments are never taxed by the state. The benefits don’t stop there: retirees age 62 or older can claim deductions on other types of retirement income, with limits that increase at age 65.
This means that most retirees in Georgia pay little to no state taxes on their income.
The state’s low cost of living, friendly communities, scenic mountain and coastal regions, and access to urban excitement and rural peace help it compete as a desirable retirement spot.
9. Hawaii
Hawaii does not tax Social Security benefits, so retirees get a helping hand on taxes even though other costs in Hawaii are among the highest in the nation.
Some types of retirement income, like pension withdrawals, may still be taxed, but Social Security checks are safe from state tax.
The state’s warm climate, beautiful landscapes, cultural diversity, and excellent medical care are strong draws, especially for people who want to enjoy a healthy outdoor lifestyle in the future.
10. Idaho
Idaho retirees do not pay state taxes on their Social Security income. Deductions are available for certain other types of retirement income, particularly public pensions for people who worked for the state or federal government.
Idaho is also known for its welcoming small towns, access to nature and outdoor activities, low crime rates, and lower housing costs than national averages.
All these factors and the Social Security exemption make Idaho a comfortable and attractive choice for many seniors.
11. Illinois
Illinois is one of the most tax-friendly states for retirees. It exempts Social Security benefits entirely and does not tax most other retirement income, including qualified pensions, 401(k) plan withdrawals, and individual retirement account (IRA) distributions.
The state’s property taxes are high, which can offset some of the savings, but many retirees find the absence of income tax on retirement funds a considerable benefit.
Illinois offers a mix of vibrant cities, cultural events, scenic rural areas, and access to top-notch medical care.
12. Indiana
Indiana lets Social Security recipients avoid state tax on their benefits, allowing them to keep more of what they’ve paid into over a lifetime of work.
While there is a flat-rate income tax for other earnings, Indiana’s cost of living is below the national average for housing, groceries, utilities, and transportation.
Retirees appreciate having both bustling cities and quiet rural escapes available and access to affordable health care.
13. Iowa
Iowa gives retirees extra financial security by not taxing Social Security checks.
Retirees may pay some tax for other retirement income, like pensions or IRAs, but can also benefit from senior-specific deductions and credits.
Iowa’s overall low cost of living helps stretch retirement savings, and its friendly communities, quiet towns, and beautiful countryside make it appealing for those wanting a slower pace without sacrificing amenities.
14. Kentucky
Retirees in Kentucky never pay state tax on Social Security income, which is a significant plus.
In addition to the full exemption for Social Security, Kentucky allows a large portion of other retirement income to be excluded from state taxes, up to a set limit each year.
The state is well known for affordable real estate, friendly communities, and a unique cultural scene, giving retirees many ways to make the most of their golden years without tax worries.
15. Louisiana
Louisiana residents who get Social Security benefits aren’t taxed at the state level, and in some cases, government pensions can also be partially or totally exempt.
Louisiana is known for low property taxes and a relaxed, culturally rich lifestyle.
Its mild winters, southern hospitality, and food culture make it a favorite for many looking to retire somewhere with tax advantages and lots of local character.
16. Maine
While winters in Maine can be snowy and cold, the state’s tax laws are warm toward retirees: Social Security benefits are fully exempt from income tax.
Maine also offers other deductions and credits that may benefit retirees, depending on their total income.
The state is home to picturesque small towns, forested landscapes, and a slower, quieter way of life ideal for retirees who want peace, friendly neighbors, and easy access to nature.
17. Maryland
Maryland does not tax Social Security benefits and offers a sizable deduction on other forms of retirement income for those over 65.
Although Maryland’s taxes in different categories can be high, these breaks help seniors stick to a budget and live comfortably.
The state offers proximity to top hospitals, big-city amenities in Baltimore and Washington D.C., and scenic coastal and rural regions, all appealing to older adults who want varied options and strong health care infrastructure.
18. Massachusetts
In Massachusetts, retirees can keep every dollar of Social Security benefits, and the state does not tax these payments.
While other retirement income may be taxed, Massachusetts provides extra credits and deductions for older adults. The high cost of living and property may be challenging.
Still, retirees often cite the state’s world-class hospitals, exciting cultural life, and active older population as important reasons for staying or moving here in retirement.
19. Michigan
Michigan exempts all Social Security benefits from state income tax, making life easier for those relying on monthly payments.
However, taxes on other types of retirement income can vary, depending on age and the source of the funds.
Michigan has affordable cities and rural areas, access to natural beauty, and many active seniors’ communities, making it a practical and enjoyable place to spend one’s later years tax-free on Social Security.