The Push to Eliminate Taxes on Social Security Benefits

There is an ongoing movement to eliminate taxes on Social Security benefits, aimed at providing retirees with greater financial relief. Currently, eight states—Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont—impose some form of tax on these benefits. John Hishta, senior vice president of campaigns at AARP, emphasized the importance of this initiative during a briefing on the 2026 tax filing season, stating that removing these taxes could lead to "meaningful, tangible savings" for older Americans.

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On the campaign trail, former President Donald Trump advocated for the elimination of taxes on Social Security benefits. However, the "One Big Beautiful Bill Act," enacted in July 2025, introduced a senior deduction of up to $6,000 for eligible taxpayers aged 65 and over instead. This law, passed through a one-party majority reconciliation process, did not allow for the elimination of taxes on Social Security benefits. The Council of Economic Advisers estimated that 88% of seniors would benefit from the deductions, which are designed to mitigate the impact of existing federal taxes on their benefits.

Social Security benefits are still taxed in some states. Why there's a push to change thatSocial Security is on track for an automatic cut that could affect your check by 23%: the new official report confirms it6 types of retirement income that aren’t taxed, and how to keep more of your money

In recent years, several states have taken steps to alleviate the tax burden on Social Security benefits. Kansas, Missouri, and Nebraska eliminated state taxes on these benefits in 2024, while West Virginia introduced a full tax deduction as of January 1, 2026. Proposals to end taxes on Social Security are also being considered in states like Rhode Island and Minnesota. However, research from the Institute on Taxation and Economic Policy (ITEP) indicates that the majority of tax savings from these proposals would primarily benefit higher-income retirees, raising questions about equity in tax policy.

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The push for tax breaks for seniors has significant implications for state budgets and the overall funding of Social Security. The One Big Beautiful Bill Act is projected to reduce tax revenue by approximately $30 billion annually, potentially accelerating the insolvency of the Social Security trust fund. According to the 2025 Social Security Trustees Report, the main retirement trust fund is expected to be depleted by 2033, with ongoing payroll taxes covering only about 77% of scheduled benefits thereafter.

Social Security is on track for an automatic cut that could affect your check by 23%: the new official report confirms itSocial Security benefits are still taxed in some states. Why there's a push to change that6 types of retirement income that aren’t taxed, and how to keep more of your money

Critics argue that tax breaks for higher-income retirees shift the financial burden onto younger generations. Carl Davis, research director at ITEP, noted that while low-income retirees are already exempt from state taxes on Social Security, proposals to eliminate these taxes for higher earners could exacerbate fiscal challenges. Additionally, experts warn that the current trajectory may necessitate politically sensitive reforms, such as increasing payroll taxes or raising the retirement age, to maintain the program's viability.

Social Security benefits are still taxed in some states. Why there's a push to change that

• "We're actively working to change that." — John Hishta, Senior Vice President of Campaigns, AARP

Social Security benefits are still taxed in some states. Why there's a push to change that

• "The question is whether higher-income retirees should get a special break as well." — Carl Davis, Research Director, ITEP

Social Security benefits are still taxed in some states. Why there's a push to change that

• "There’s no easy fix left on the table." — Bloomberg Editorial

Social Security is on track for an automatic cut that could affect your check by 23%: the new official report confirms it

The ongoing discussions surrounding the elimination of taxes on Social Security benefits reflect broader concerns about the financial security of retirees and the sustainability of the Social Security program. As states consider changes to their tax policies, the implications for both retirees and younger taxpayers remain a critical area of focus.

Social Security benefits are still taxed in some states. Why there's a push to change that