Tax Tips for Retirees in East Coast States

Tax season is fairly stressful for most Americans and can be especially so for retirees on fixed incomes who cannot afford heft taxation. That’s why finding a tax-friendly state can be so beneficial for retirees — in the right state, a retired senior can be exempt from nearly all retirement income taxation and can also take advantage of a number of tax benefits tailored to each state.

Curious where the most tax-friendly states are in the American East? Hoping to retire to the East Coast and need to know where you’ll pay less? GOBankingRates has culled a bevy of state-based tax information.

Social Security benefits get taxed in Connecticut, but the state offers an exemption for seniors who make less than $75,000 (as single filers) or $100,000 (as joint filers). Anyone meeting that criteria does not pay taxes on Social Security income. 

Further, Connecticut offers a “property tax circuit breaker” to homeowning residents, a tax credit of $1,000 for single filers and $1,250 for joint filers.

Not only is Social Security income exempt from all state taxes, but the state has a rather low property tax level, has no inheritance tax and no estate tax and is one of four states with no local or state sales taxes. 

Additionally, Delaware makes available a deduction of up to $12,500 on retirement savings or pension income. 

Find Out: Top 8 States To Move to If You Don’t Want To Pay Taxes on Social Security

Florida is essentially a tax haven on the East Coast, offering no state income tax, no tax on Social Security income, no tax on any form of retirement income and relatively affordable property taxes. Further, the Sunshine State offers exemptions for its property taxes — with $25,000 exempted from a home’s assessed value, and an additional $50,000 exception available to retirees over the age of 65.

Not only does Georgia not tax Social Security income, it offers a tax exclusion for seniors on retirement income — retirees between 62 and 64 can exclude $35,000, and retirees 65 and older have an exclusion of $65,000 applied to all retirement income. If a taxpayer has retirement income of less than $65,000, they pay no taxes at all.

Maine is yet another state in which Social Security income is exempt from being taxed; meanwhile, such retirement income as IRAs, pensions and 401(k)s are still taxed. Maine does offer a homestead exemption though — some homeowners can claim exemptions up to $25,000 on their property taxes.

While Maryland has a fairly high estate and inheritance tax, it somewhat evens out by having no Social Security income taxation. The state offers a homestead credit, though, that’s worth taking advantage of. Available to all taxpayers who own homes, the credit is equal to 10% of the assessed value of their homes.

Social Security income and benefits are exempt in Massachusetts, though other forms of retirement income are not. However, there is the Real Estate Tax Credit for Persons 65 and Older, which refunds all property taxes paid up to $2,730.

See Why: 6 Reasons Your Tax Refund Will Be Higher in 2025

New Hampshire is a state with zero income tax, so retiree benefits such as Social Security are not taxed. That said, the state does come with property taxes that are over twice the average of the rest of America, which can be difficult come tax season. 

There is a property tax rebate, though, that is available for homeowners with incomes under $37,000 (for single filers) or $47,000 (for joint filers).

Social Security is not taxed by New Jersey, but the state does have the highest property taxes in America. To counter this, the state offers a hefty retirement income deduction for those over the age of 62 who make less than $150,000 — they can deduct up to $75,000.

Not only does New York not tax Social Security income, it also offers retirees a $20,000 deduction on retirement income such as an IRA, company pension or 401(k)s.

Read More: American Opportunity Tax Credit — What Is It and Who Qualifies?

North Carolina does not tax Social Security income and offers a few other exceptions. The Bailey exemption lets taxpayers with federal government retirement plans or state/local government retirement plans to completely exempt their incomes, and the state’s low-income exclusion lets those who are 65 or older with an income under $33,800 deduct either $25,000 or 50% of taxable value, whichever happens to be higher.

Anyone over the age of 60 in Pennsylvania has cause to celebrate during tax season — all of their retirement income, be it via Social Security or other streams, is exempt from taxation. Further, Pennsylvania seniors can take advantage of a property tax rebate if they are over 65 or are widowed or have disabilities and make under $45,000.

Unlike most states in the union, Rhode Island taxes Social Security benefits. To counter this, the Ocean State does allow taxpayers who have reached retirement age access to a $20,000 exclusion that can subtract taxable income from their retirement plans.

Read Next: 10 States With Low Taxes and 10 Low-Cost-of-Living States Retirees Should Target

South Carolina taxpayers over the age of 65 can take a $10,000 deduction on all non-Social Security retirement income plans such as 401(k)s and IRAs. Elsewhere, the state does not tax Social Security benefits. The state also offers a Homestead Exemption, in which the first $50,000 of a home’s fair market value is exempt from taxation. 

Vermont taxes Social Security and other forms of retirement income, and carries rather high income tax rates. In a break for taxpayers, Vermont provides a Social Security exemption, the size of which depends on a taxpayer’s adjusted gross income. There is also a property tax credit for homeowners with incomes under $115,000, with the credit worth up to $8,000.

Virginia is a state that does not tax Social Security income whatsoever. Additionally, seniors in the state can take advantage of a deduction up to $12,000 annually against their retirement income.

West Virginia is slowly phasing out the taxation of Social Security — by 2026, all Social Security benefits will be tax exempt (currently, 35% are exempt from the 2024 tax year, and 65% will be exempt for 2025). 

The state also allows seniors over the age of 65 to claim deductions of $8,000 against their retirement income. There is also a homestead exemption of $20,000 on the assessed value of a taxpayer’s property.