Americans on Social Security There could be new federal tax breaks in 2026, and some states will stop taxing benefit income.
The largest social safety net in the United States provides monthly payments that help 74 million people afford basic necessities. Americans contribute to the program during their working careers, which is also supplemented by the federal government.
Beneficiaries' final tax bill depends on their state, annual income, and deduction eligibility.
Federal Social Security Taxes
Social Security Income usually taxed at the national level. Americans can pay taxes on up to 85% of their Social Security payments, depending on household income.
But those who take home less than $25,000 as an individual and $32,000 as a couple are tax-free. Needs-based supplemental social security is also tax-free.
Senior tax deductions
And President Donald Trump One big beautiful bill law will bring more tax benefits to seniors. In the new year, taxpayers age 65 and older can claim up to $6,000 in addition to the regular standard deduction. This builds on the existing tax credit for seniors. The extended breaks under Trump will last until 2028.
That means older Americans filing 2025 tax returns could claim up to $23,750, while joint filers over 65 could claim up to $46,700.
Some states tax Social Security income
States can set their own Social Security tax rules along with national requirements. Eight states taxed Social Security income this year, while 41 did not. And in 2026, West Virginia will stop taxing the benefits.
The amount beneficiaries will pay in state taxes varies widely depending on local laws and household income. Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont impose a Social Security tax, although low-income retirees are often exempt.
Colorado also allows some seniors to deduct federal Social Security taxes from their expected state contributions.
See below to see if your state's taxes are generating revenue.
