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West Virginia Is the One State That Taxes a $44,000 Retiree's 2027 Social Security Raise
A single retiree with $24,000 of Social Security and a $20,000 pension gets an $864 raise in January 2027, and on 2026 law West Virginia is the only state that taxes any of it, about $6 a year. The federal return and the other 50 jurisdictions leave the household's bill where it was.
The Social Security Administration set the cost-of-living adjustment at 3.6%, starting with December 2026 benefits paid in January 2027. It comes from the third-quarter CPI-W, which averaged 328.746 in 2026 against 317.265 in 2025.
The household
The retiree was born in 1958, files single, and has two sources of income: $24,000 a year of Social Security before the raise and a $20,000 private pension. Together that is $44,000. TaxMath's P5 retiree files jointly on $85,000, and the joint state tables that persona needs are not built yet, so this piece works one single filer through every state instead.
The raise lands in the 2027 tax year, and TaxMath's tax tables and state rules stop at 2026. Every figure below applies 2026 law to the raised benefit, so it reads as the 2026 return of a household that had already received the 2027 check. Thresholds that rise with inflation for 2027 would leave the household further below them, never closer.
The federal return counts $216 of the raise
Federal tax depends on how much of the benefit is taxable, and 26 U.S.C. §86 decides that with numbers Congress never indexed: a single filer's benefits start to be taxed once provisional income passes $25,000, and up to 85% is taxed above $34,000.
| 2026 law | $24,000 of benefits | $24,864 of benefits |
|---|---|---|
| Pension plus half the benefits (provisional income) | $32,000 | $32,432 |
| Taxable Social Security, 50% of the excess over $25,000 | $3,500 | $3,716 |
| Adjusted gross income | $23,500 | $23,716 |
| Standard deduction, 65 or older, plus the senior deduction | $24,150 | $24,150 |
| Taxable income | $0 | $0 |
The deduction line is the $16,100 standard deduction, the $2,050 extra for an unmarried filer 65 or older in Rev. Proc. 2025-32, and the $6,000 senior deduction that runs from 2025 through 2028 and starts phasing out only above $75,000 of modified AGI (IRS). For 2026 they cover all of this household's AGI before and after the raise, so its federal tax stays at zero.
The fixed $25,000 threshold is why each raise counts at all. Because §86 never moves, every COLA pushes more of a benefit over it, and this one moves $216 into AGI. Most states read that line and then subtract it again.
West Virginia: the exemption that the senior modification takes back
West Virginia stopped taxing Social Security for 2026. W. Va. Code §11-21-12(c)(8) subtracts 100% of the benefits included in federal AGI at any income. Subdivision (c)(9) of the same section gives a filer 65 or older a separate $8,000 subtraction from any income source, "limited to the difference between $8,000 and the sum of modifications under subdivisions (1), (2), (5), (6), (7), and (8)". Social Security is subdivision (8).
So for a West Virginian over 65 whose taxable benefits come to less than $8,000, every dollar of benefit the state exempts is a dollar less of senior modification:
| West Virginia, 2026 law | Before the raise | After the raise |
|---|---|---|
| Federal AGI | $23,500 | $23,716 |
| Social Security modification, (c)(8) | −$3,500 | −$3,716 |
| Senior modification, $8,000 less (c)(8), (c)(9) | −$4,500 | −$4,284 |
| Personal exemption | −$2,000 | −$2,000 |
| West Virginia taxable income | $13,500 | $13,716 |
The $216 lands in the band taxed at 2.81%, which starts at $10,000 of taxable income, so the raise costs about $6. Read the two subtraction lines together and they always sum to $8,000 for this filer. The Social Security exemption lowers this household's West Virginia tax by nothing, because the senior modification gives back exactly what the exemption takes off, and the part of the raise the federal return counts is taxed as if no exemption existed.
Maryland and Maine shrink a pension break instead
Two more states leave Social Security out of income but cut a pension exclusion by every benefit dollar received, taxable or not. Each COLA dollar there can move a dollar of pension into the tax base, four times what the federal return counts.
Maryland's pension exclusion for a filer 65 or older is $40,600 for 2026, and its worksheet subtracts all Social Security received, "not just those benefits you included in your federal adjusted gross income". At $24,000 of benefits the exclusion is $16,600; at $24,864 it is $15,736. Maryland already leaves the taxable benefits out (Comptroller), so Maryland AGI rises from $3,400 to $4,264. That is still under the $3,400 standard deduction plus the $3,200 exemption (MW507 instructions), and this household owes Maryland nothing either way.
Maine's Schedule 1S pension deduction works the same way at a higher cap, $49,824 for 2026 (1040ES-ME). Less $24,864 of benefits, that leaves $24,960 of room for a $20,000 pension, so the raise changes nothing here. A Maine retiree whose pension already fills the cap loses a dollar of deduction for every dollar of raise.
Idaho, Indiana and Missouri also reduce a pension break by Social Security, but only for public or military pensions (§63-3022A, IT-40, Missouri DOR). This household's pension is private, so none of the three applies.
The eight states that tax benefits leave this one alone
| State | Rule for 2026 | This household | Where the raise starts to cost state tax |
|---|---|---|---|
| Colorado | At 65 or older, all federally taxable benefits subtracted (DOR) | Subtracted in full | Only for filers under 65 |
| Connecticut | Exempt below $75,000 of AGI single (DRS-162) | $23,716, exempt | AGI at $75,000 or more |
| Minnesota | Subtracted in full up to $86,410 of AGI single (2026 amounts) | Subtracted in full | AGI above $86,410 |
| Montana | Taxed as on the federal return (DOR) | Federal taxable income is $0 | Once federal taxable income is above zero |
| New Mexico | Exempt up to $100,000 of income single (TRD) | Exempt | Income above $100,000 |
| Rhode Island | Subtracted at full retirement age under an AGI limit, $107,000 single for 2025 (ADV 2025-22) | At 68, past full retirement age and under the limit | Above the limit, or before full retirement age |
| Utah | Taxed, offset by a credit that phases out above $54,000 of modified AGI single (§59-10-1042) | Credit not phased down | Modified AGI above $54,000 |
| Vermont | Excluded in full up to $55,000 of AGI single (32 V.S.A. §5830e) | Excluded; the pension is still taxed | AGI above $55,000 |
None of the eight charges this household a dollar more for the raise. Vermont taxes the pension, and the bill on it stays where it was; in Utah the taxpayer and Social Security credits leave this household owing nothing before and after. Rhode Island has not published its 2026 limit, and the 2025 figure is more than four times this household's AGI.
The remaining 31 jurisdictions that tax wages exclude Social Security entirely and have no pension offset that reaches a private plan, so the raise passes through them untaxed. The nine with no tax on wages or benefits take nothing either.
Who the raise does reach
The household sits low enough that only a West Virginia statute drafted for a different purpose reaches it. A retiree with more income meets the table's last column: a Connecticut filer with $80,000 of AGI, a Utah filer whose credit is already phasing down, or any Coloradan under 65. On the federal side, a single filer past $34,000 of provisional income has up to 85 cents of each new benefit dollar taxed. In Maryland a pension that already outruns its $40,600 cap less benefits loses $864 of exclusion to an $864 raise.
For the 2027 return the federal standard deduction and most state thresholds will be indexed upward, and the $6,000 senior deduction stays through 2028. West Virginia's $8,000 senior modification is a fixed figure in §11-21-12(c)(9), so unless the Legislature amends it, the trade-off against the Social Security subtraction carries into 2027 unchanged.
Sources
Ordered by authority — the law and the agencies administering it first. Every link is checked for rot; see all sources.
- Primary lawIdaho Code §63-3022A — Deduction of certain retirement benefitsIdaho Legislature · checked 2026-10-21Subsection (1)(b): military retirement benefits qualify for a retiree who is disabled, has reached 62 by the end of the tax year, or was employed during the year with enough employment income to be required to file a federal return. The deduction is capped at the maximum Social Security benefit, less Social Security and railroad retirement received. As amended by 2025 chapters 13 and 302.Other articles citing this source
- Primary law26 U.S. Code §86 — Social Security and tier 1 railroad retirement benefitsLegal Information Institute, Cornell Law School · checked 2026-10-21§86(a): taxable benefits are the lesser of half the benefits or half the excess of modified AGI plus half the benefits over the base amount; above the adjusted base amount, 85 percent of that excess plus the lesser of the first-tier amount or half the gap between the two bases, capped at 85 percent of benefits. §86(c): base amount $25,000 ($32,000 joint), adjusted base amount $34,000 ($44,000 joint); neither is indexed.Other articles citing this source
- Primary lawUtah Code §59-10-1042 — Social Security benefits credit (effective 1/1/2026)Utah State Legislature · checked 2026-10-21The credit equals the tax rate times Social Security benefits in state taxable income, reduced by 2.5 cents per dollar of modified AGI above $54,000 single, $90,000 joint or head of household, $45,000 married separate. A claimant may not also take the §59-10-1019 retirement credit.Other articles citing this source
- Primary law32 V.S.A. §5830e — Social Security and retirement income exclusionsVermont General Assembly · checked 2026-10-21Social Security is fully excluded at AGI of $55,000 or less ($70,000 married joint), proportionally to $65,000 ($80,000), and not at all above. The first $10,000 of CSRS or other non-Social-Security-covered public pension income is excludable on the same scale, but a filer elects only one of the three exclusions. Military retirement is fully excludable up to $125,000 of AGI, phasing out to $175,000, and may be claimed alongside.Other articles citing this source
- Primary lawW. Va. Code §11-21-12 — modifications reducing federal adjusted gross incomeWest Virginia Legislature · checked 2026-09-01Subsection (c)(8): Social Security fully exempt under $50,000/$100,000 of federal AGI since 2022; HB 4880 (2024) phases the exemption in above those limits — 35% (2024), 65% (2025), 100% for taxable years beginning on or after January 1, 2026.Other articles citing this source
- GovernmentIncome Tax Topics: Social Security, Pensions, and AnnuitiesColorado Department of Revenue · checked 2026-10-21C.R.S. 39-22-104(4)(f): filers 65 and over subtract all federally taxable Social Security; filers 55 to 64 subtract all of it if AGI is $75,000 or less ($95,000 joint) from tax year 2025, otherwise it counts toward the $20,000 cap. The pension and annuity subtraction is $20,000 at 55 to 64 and $24,000 at 65 and over, per person, reduced by any Social Security subtracted; premature IRA distributions do not qualify.Other articles citing this source
- GovernmentForm MW507 Instructions (2026)Comptroller of Maryland · checked 2026-10-21"Standard deduction is $3,400"; the value of each personal exemption is generally $3,200 and may be reduced when federal AGI exceeds $100,000 for a single filer.Other articles citing this source
- GovernmentMaryland Pension Exclusion (KB0010012)Comptroller of Maryland · checked 2026-10-21For filers 65 or older or totally disabled. The maximum was $41,200 for 2025; "For calendar year 2026, the maximum pension exclusion is $40,600." Employee retirement systems qualify; IRA, Roth, SEP and Keogh distributions do not. The exclusion is reduced by Social Security and railroad retirement received.Other articles citing this source
- GovernmentSeniors and Retirees Frequently Asked Questions (KB0010124)Comptroller of Maryland · checked 2026-10-21Social Security is not taxed by Maryland. Military retirement: up to $20,000 at 55 or older, up to $12,500 under 55.Other articles citing this source
- GovernmentDRS-162 — Connecticut income tax information for seniorsConnecticut Department of Revenue Services · checked 2026-10-21Social Security is fully exempt when federal AGI is under $75,000 (single, married filing separately) or $100,000 (joint, head of household, qualifying surviving spouse), partly exempt above. The pension and annuity subtraction phases out between $75,000 and $100,000 ($100,000 and $150,000 joint); the IRA distribution subtraction phases in to "100% for 2026 and thereafter".Other articles citing this source
- Government2025 IT-40 instruction bookletIndiana Department of Revenue · checked 2026-10-21Schedule 2 deducts Social Security and railroad retirement. Deduction 632: military retirement and survivor benefits, the entire amount for 2022 and later. Deduction 601: civil service annuity at 62 or older, up to $16,000 minus Social Security and railroad retirement received.Other articles citing this source
- GovernmentRevenue Procedure 2025-32 — tax year 2026 inflation adjustmentsInternal Revenue Service · checked 2026-10-20The revenue procedure itself: the §1(j)(2) rate tables with their formula rows, the capital-gains thresholds, the child tax credit amount, the §4.14 standard-deduction rows and §63(f) aged/blind additional amounts, and the §2 background listing which OBBBA sections changed each figure.Other articles citing this source
- GovernmentTax deductions for working Americans and seniorsInternal Revenue Service · checked 2026-08-02IRS summary of the tips, overtime, car loan interest, and senior deductions and their limits.Other articles citing this source
- Government2025 Form 1040ME Schedule 1S — income subtraction modificationsMaine Revenue Services · checked 2026-10-21Line 3 subtracts Social Security and railroad retirement. The pension deduction worksheet takes pension and IRA income from federal lines 4b and 5b, capped at the annual maximum minus all Social Security and railroad retirement received; the non-military deduction phases out above federal AGI of $125,000 single or separate, $187,500 head of household, $250,000 joint; military retirement pay is deductible in full.Other articles citing this source
- Government2026 Form 1040ES-MEMaine Revenue Services · checked 2026-10-21The maximum pension income deduction "is increased to $49,824 for tax year 2026."Other articles citing this source
- GovernmentTax Year 2026 Inflation-Adjusted AmountsMinnesota Department of Revenue · checked 2026-10-21Social Security subtraction (simplified method) phase-out thresholds for 2026: $110,780 married joint and qualifying surviving spouse, $86,410 single and head of household, $55,390 married separate. Public pension subtraction maximum $27,690 joint and $13,850 for other filers, on the same thresholds.Other articles citing this source
- GovernmentPension FAQsMissouri Department of Revenue · checked 2026-10-21From tax year 2024, Social Security is fully exempt at 62 or older with no income limit. The public pension exemption equals the maximum Social Security benefit ($48,967 for 2026), reduced by the Social Security deduction. The private pension exemption is up to $6,000, in full only at Missouri AGI of $25,000 or less ($32,000 married joint, $16,000 separate). Military pensions are subtracted.Other articles citing this source
- GovernmentMontana Tax Simplification Resource HubMontana Department of Revenue · checked 2026-10-21Montana starts from federal taxable income, so taxable Social Security is included as it is federally. The partial pension, annuity and IRA exemption was repealed. Taxpayers 65 and over get a $5,500 subtraction ($11,000 if both spouses qualify), adjusted for inflation beginning with tax year 2025; the page does not state the 2026 amount.Other articles citing this source
- GovernmentSocial Security Income Tax ExemptionNew Mexico Taxation and Revenue Department · checked 2026-10-21From tax year 2022, Social Security is exempt for filers with income under $100,000 single, $150,000 married joint, head of household or surviving spouse, and $75,000 married separate.Other articles citing this source
- GovernmentADV 2025-22 — Tax Year 2025 inflation adjustmentsRhode Island Division of Taxation · checked 2026-10-21The Social Security modification requires full retirement age and federal AGI under a limit: $107,000 single, head of household and married separate, $133,750 married joint for 2025. The pension, 401(k) and annuity modification uses the same limits and allows up to $50,000 starting with tax year 2025. Only 2025 figures are published.Other articles citing this source
- GovernmentLatest Cost-of-Living AdjustmentSocial Security Administration, Office of the Chief Actuary · checked 2026-11-09The latest COLA is 3.6 percent: Social Security benefits rise 3.6 percent beginning with the December 2026 benefits, payable in January 2027. Computed from the third-quarter CPI-W average, 328.746 for 2026 against 317.265 for 2025.Other articles citing this source