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As of November 2012, there were seven states that did not charge any type of state income tax, including taxes on Social Security benefits. These states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two more states, Tennessee and New Hampshire, do not tax income or Social Security benefits, but do tax interest and dividends.
That depends on your income. In principle, the answer is yes, Social Security income is taxable. In practice, itâs not quite that simple. If you have other income in retirement, income from a 401(k), for example, then you should expect to pay taxes on our Social Security benefits.