Which States Still Tax Social Security in 2026 – and How Much Will You Owe?

For millions of retirees, 2026 marks a notable shift in how Social Security benefits are taxed across the United States. Recent changes at both the state and federal level are reshaping the tax landscape, with fewer states imposing taxes and new federal deductions offering broader relief.

This article provides a factual overview of where Social Security benefits are still subject to state taxation in 2026, how the federal tax calculation works, and what the new federal deductions under the “One Big Beautiful Bill Act” (OBBBA) mean for retirees.

States

As of 2026, only seven states continue to tax Social Security benefits. This is a reduction from previous years, driven by state-level legislative efforts to support retirees. The most recent change occurred in West Virginia, which officially stopped taxing Social Security benefits on January 1, 2026, completing a phased exemption process.

The following states still impose some form of tax on Social Security income:

While these states do tax benefits, several offer partial exemptions or tax credits depending on income levels. Many retirees in these states may not owe any tax if their total income is within the exemption limits.

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Federal

On the federal level, Social Security benefits can still be subject to taxation depending on a retiree’s combined income. The federal formula has not changed in 2026 despite the introduction of new deductions under OBBBA.

Combined income is calculated as:

Adjusted Gross Income (AGI) + Nontaxable Interest + 50% of Social Security Benefits

Based on combined income, the IRS applies the following thresholds:

These percentages refer to how much of a retiree’s Social Security benefits may be included in their taxable income. It does not mean retirees are taxed at 85 percent, but rather that up to 85 percent of the benefit amount is subject to income tax based on their total income.

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Deductions

To assist retirees, the federal government introduced a new tax provision under the One Big Beautiful Bill Act (OBBBA), signed in July 2025. This provision provides an additional deduction for taxpayers aged 65 and older from 2026 through 2028.

This OBBBA deduction is:

• $6,000 for individuals aged 65 or older
• $12,000 for married couples filing jointly if both are 65 or older

This is in addition to the existing standard deduction and the age-based additional deduction already available to older taxpayers.

For 2026, the total deductions a senior taxpayer may claim are:

These expanded deductions reduce a retiree’s taxable income, potentially lowering or eliminating the federal income tax owed on their Social Security benefits.

Planning

Retirees should evaluate how these tax changes affect their overall financial situation. Those residing in one of the seven states that still tax Social Security benefits should consult their state’s income thresholds and possible credits or exemptions.

At the federal level, even though the method of calculating taxable benefits remains unchanged, the enhanced deductions under OBBBA could make a significant difference for those with moderate incomes. Knowing combined income and adjusting withdrawals from retirement accounts may help some retirees remain below higher taxation thresholds.

For most retirees, 2026 represents a more favorable tax environment. The reduction in the number of states taxing Social Security benefits, combined with expanded federal deductions, provides increased financial flexibility for seniors planning their retirement income strategy.

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