Does your state tax Social Security?

-Source-USA-Today- Retirees in these states could potentially keep more of their Social Security benefits. Nearly three-fourths of U.S. states dont tax Social Security benefits at all although your Social Security benefits can be taxed by the IRS regardless of where you live. Heres a quick guide to the 37 states that dont tax Social Security benefits how Social Security is taxed on the federal level and what you need to know if your state isnt on the tax-free Social Security list. Most states dont tax Social Security benefits Heres the easy answer: If you live in one of these 37 states (or Washington D.C.) your Social Security benefits arent taxed on the state level: Alabama Alaska Arizona Arkansas California Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kentucky Louisiana Maine Maryland Massachusetts Michigan Mississippi Nevada New Hampshire New Jersey New York North Carolina Ohio Oklahoma Oregon Pennsylvania South Carolina South Dakota Tennessee Texas Virginia Washington (state) Washington (D.C.) Wisconsin Wyoming. These states may however be subject to federal income tax which well get to in a minute. How much federal income tax could you pay on Social Security benefits? It also is important to point out that just because you live in a state that doesnt tax Social Security benefits you still may have to pay federal income tax on them regardless of where you live. Specifically the IRS uses an income test to determine if a portion of your Social Security benefits are taxable for federal income tax purposes. The IRS defines your combined income as one-half of your Social Security benefits and all of your other sources of income -- even non-taxable bond interest is included in this figure.