Americans on Social Security could see new federal tax breaks in 2026 — and some states will stop taxing benefit income.
The largest social safety net in the US provides monthly payments that help 74 million people afford essentials. Americans pay into 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 eligibility for deductions.
Federal Social Security taxes
Social Security income is typically taxed at the national level. Americans may 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 do not have their benefits taxed. Need-based Supplemental Social Security also isn’t subject to tax.
Senior tax deductions
And President Donald Trump’s One Big Beautiful Bill Act will bring more tax relief to seniors. In the new year, taxpayers 65 and older can claim up to $6,000 in addition to their normal standard deduction. This builds on an existing tax deduction for older adults. The expanded breaks under Trump are set to last through 2028.
This means that older Americans filing their 2025 tax returns can write off as much as $23,750, and joint filers over 65 could claim as much as $46,700.
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Some states tax Social Security income
States are able to set their own Social Security tax rules alongside national requirements. Eight states taxed Social Security income this year, while 41 didn’t. And, in 2026, West Virginia will stop taxing benefits.
The amount beneficiaries will pay in state-level taxes varies widely depending on a local laws and household earnings. Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont tax Social Security — though lower-income retirees are often exempt.
Colorado also allows some seniors to deduct their federal Social Security taxes from their expected state contribution.
See below if your state taxes benefit income.
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