The Economic Times

Social Security tax by state in 2026: Which 8 states tax retirement benefits, where can retirees keep more of their benefits, and how much could you owe the IRS?

Social Security benefits are not tax-free for every retiree in 2026. Just over half of beneficiaries are expected to pay federal income tax on their benefits, according to the Congressional Budget Office. Eight states also tax Social Security payments, although income-based exemptions offer relief. Federal tax thresholds, retirement withdrawals and state rules will determine how much retirees actually keep.