Which States Skip Social Security Taxes? Arkansas and 40 Others Offer Tax Relief in 2025

For American retirees, the location of residence significantly impacts how much Social Security income they actually keep. With up to 85% of benefits potentially subject to federal taxation, state-level taxes represent an additional financial consideration. The good news: as of 2025, the majority of U.S. states have opted not to tax Social Security income.

The Current Landscape: 41 States and D.C. Provide Tax Relief

Arkansas leads a growing group of 41 states plus Washington, D.C. that exempt Social Security benefits from state income taxation in 2025. This represents a substantial portion of the country, reflecting an expanding trend toward protecting retirees’ income.

The complete list of states offering full exemption includes:

Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, and Wyoming, along with Washington, D.C.

The Minority: 9 States That Still Tax Social Security

Only nine states maintain taxation on Social Security benefits:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia (phasing out beginning 2026)

Recent shifts have made the tax picture even better. Missouri and Nebraska eliminated their Social Security taxes in 2024, while Kansas passed legislation mid-year to stop taxation. For residents in Arkansas and similar states, this exemption provides meaningful financial protection during retirement years.

State-Specific Rules Matter

The details vary by jurisdiction. Colorado, for example, already allows residents 65 and older to fully deduct federally-taxed Social Security benefits. Beginning in 2025, Colorado will expand this benefit to ages 55-64 with adjusted gross income limits of $75,000 (individual) or $95,000 (joint filing). Those in Arkansas and other exempt states enjoy simpler tax planning, while residents of taxing states should evaluate their specific situation.

Calculating Your Potential Savings

Retirees in non-taxing states can estimate their tax savings by applying their effective state tax rate to total Social Security income. For a resident receiving $30,000 annually with a 5% effective state tax rate, the savings would equal $1,500 per year.

The aggregate impact is substantial. Missouri retirees collectively save approximately $309 million annually, while Nebraska residents preserve around $17 million in benefits through non-taxation policies.

The Bottom Line

For those in Arkansas and the 40 other exemption states, Social Security income receives full protection from state taxes. This makes these jurisdictions financially advantageous for retirement planning. Even within taxing states, certain age-based or income-based deductions may apply, so reviewing your specific state’s current provisions remains essential before finalizing retirement income projections.