The majority of Social Security recipients do not pay state taxes on their retirement income. As it stands, only nine states still tax Social Security benefits: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia, the last of which is phasing out taxing Social Security income in 2026.

Recent state reforms in the U.S. aim to reduce or eliminate state taxes on Social Security benefits, offering financial relief to retirees. However, it's crucial to understand that these changes do not impact federal taxes,

Some supporters of Social Security privatization suggest allowing workers to invest a portion of their current contributions in private accounts.