Over half of the taxing states in the U.S. provide a full exemption for Social Security benefits. This special tax relief for retirees is available in the District of Columbia and these 27 states:
- Alabama
- Arizona
- Arkansas
- California
- Delaware
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa will phase out their tax on Social Security between 2007 and 2014.
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Mississippi
- New Jersey
- New York
- North Carolina
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- South Carolina
- Virginia
- Wisconsin
Read more about state income taxes for retirees and find out which states are the most tax-friendly for retirees.