5 States That Do Not Tax Social Security or Retirement Income

2. Iowa

Insider Monkey Score: 19

Tax Friendliness: Moderately Tax Friendly

Cost of Living Index: 89.9

In the state of Iowa, all Social Security retirement benefits are exempt from taxation. Moreover, until the tax year 2022, Iowans were provided deductions on other types of retirement income. The tax year 2023 is going to be different as Iowans aged 55 and older will be exempt from paying state taxes on retirement income. The state is also a nice place to retire because of its low cost of living, which is 10.1% lower than the national average.