State Social Security exemptions and conditional relief
A state can exclude Social Security while taxing a pension or IRA withdrawal. State benefit relief also does not decide the federal taxable portion.
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Changes that old retirement charts can miss
West Virginia completes its Social Security subtraction phase-in at 100% in tax year 2026. The previous year’s partial rule for some recipients is not the current percentage. Nebraska reached its full subtraction for tax years beginning in 2024. Kansas removed the former benefit income ceiling under its post-2023 provision.
Examples of excluded benefits
State guides for California, Illinois, Iowa, North Carolina, Pennsylvania and Wisconsin explain the separate Social Security treatment alongside pension and account rules. These examples are not a claim that every kind of retirement income is excluded in those states.
An ordinary resident retirement-income calculation also has no individual state income-tax layer in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming under the displayed 2026 scope. Other-state source income, business taxes and Washington’s separate nonretirement capital-gains tax require their own review.
Conditional benefit relief needs the actual worksheet
- Colorado: age, federal AGI and the interaction with pension subtraction room.
- Connecticut: filing-status benefit thresholds separate from pension and IRA modifications.
- Minnesota: compare the simplified and alternate benefit subtraction.
- New Mexico: filing-status income limits.
- Rhode Island: full retirement age, eligible income and the source’s actual tax year.
- Utah: a credit with income and coordination rules, rather than an unconditional exclusion.
- Vermont: benefit phaseouts and retirement-exemption coordination.
- Missouri: age 62 or qualifying disability eligibility under the post-2023 provisions.
- Montana: the post-2023 federal taxable-income starting base and separate indexed senior subtraction.
Federal tax can still apply
The federal test uses provisional income, including half of benefits and relevant other income. Benefits can fall in a zero, 50% or 85% inclusion zone. An 85% inclusion limit is not an 85% tax rate. Use the federal benefit worksheet, then prepare the state subtraction or credit using the federally included amount and the state’s required income definition.
For all destinations, use the 50-state table of guides. A state’s income-tested exemption can change after a larger withdrawal even when the recipient’s age and pension remain unchanged. A headline count of exempt states cannot determine that household’s liability.
Updated / verified · Retirement Income Tax Calculator Editorial Team