Retirees in a handful of states may enjoy fatter wallets this year.
In several places, state income taxes on Social Security retirement benefits are lower in 2025 due to recent legislation. And in one other state, taxes might be cut sometime this year.
It is important to note that these changes do not impact the amount of federal tax on Social Security benefits. But a falling state tax rate is still a good reason for many seniors to cheer.
Here are the places where state income taxes on Social Security are falling, or might soon be.
Colorado
Estimated population of this state: 6 million as of 2024
Share of the population aged 65 or older: 16%
A law enacted in 2024 widened the pool of residents who can exclude the federally taxable portion of their Social Security benefits from their state taxable income.
Starting with the 2025 tax year, Colorado residents 55 and older who collect Social Security are eligible to exclude the federally taxable portion of their benefits. Previously, only residents who were 65 or older were allowed to do so.
To qualify, you must have an adjusted gross income of $75,000 or less for a single filer or $95,000 for a couple filing jointly.
Kansas
Estimated population of this state: 2.9 million as of 2024
Share of the population aged 65 or older: 17.5%
A tax cut package enacted in 2024 exempted all residents’ federally taxable Social Security benefits from state income taxes, starting with the 2024 tax year. That means this tax season is the first during which residents can benefit from the change.
Previously, this exemption was only available to Kansans with a federal adjusted gross income of $75,000 or less.
West Virginia
Estimated population of this state: 1.8 million as of 2024
Share of the population aged 65 or older: 21.5%
A West Virginia law enacted in 2024 is phasing out state income taxes on Social Security benefits that are included in federal adjusted gross income.
The phase-out schedule is:
- 2024 tax year: 35% of these Social Security benefits are excluded from state taxable income
- 2025 tax year: 65%
- 2026 tax year: 100%
Previously, federally taxable Social Security benefits were excluded from state income tax only for those earning less than $50,000 in the case of single taxpayers or $100,000 for couples filing joint returns. So, the 2024 law extended the exemption to everyone, regardless of income.
Missouri
Estimated population of this state: 6.2 million as of 2024
Share of the population aged 65 or older: 18.3%
A law that was enacted in 2023 and took effect starting with the 2024 tax year removed income limitations on the state’s tax deduction for federally taxable Social Security benefits.
As a result, this tax season is the first during which no Missouri residents age 62 or older will pay state taxes on their federally taxable Social Security benefits.
Nebraska
Estimated population of this state: 2 million as of 2024
Share of the population aged 65 or older: 17.2%
A Nebraska law that was enacted in 2023 and took effect starting with the 2024 tax year — one year sooner than was previously planned — exempts federally taxable Social Security benefits from state income taxes. So, this tax season is the first during which residents can benefit from the change.
Utah
Estimated population of this state: 3.5 million as of 2024
Share of the population aged 65 or older: 12.2%
In Utah, elimination of state income taxes on Social Security benefits hasn’t happened yet — but it might soon.
In December, Gov. Spencer Cox recommended “the complete elimination of the state tax on Social Security benefits.” As of late January, legislators reportedly aren’t sold on it, with some suggesting that a cut in the state’s regular income tax might make more sense.
But that doesn’t mean the move to lower Social Security taxes won’t happen. So, seniors in the Beehive State should stay tuned.
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