Does Tennessee Tax Social Security? A Complete Guide to Southern Retiree Tax Benefits

When planning retirement, one of the most critical decisions is choosing where to settle. For those considering the American South, understanding state tax policies on retirement income can make a significant difference in your financial stability. A common question among prospective retirees is: does Tennessee tax social security? The answer is straightforward and highly favorable. Tennessee stands out as one of the most tax-friendly southern states, offering complete exemption from taxation on Social Security benefits, combined with other retirement-focused advantages that deserve serious consideration.

Tennessee’s Social Security Tax Exemption: The Primary Advantage

The most important detail for Tennessee retirees is this: Tennessee does not tax Social Security income at all. Combined with Tennessee’s broader tax structure—the state has no state income tax whatsoever—retirees enjoy comprehensive protection of their retirement funds. This is a substantial benefit compared to many other states that impose varying levels of taxation on retirement income.

Beyond Social Security protection, Tennessee keeps taxes low through particularly modest property tax rates, which provides additional relief for homeowners. The state also offers a Property Tax Relief Program specifically designed for retired individuals, allowing those earning no more than $36,370 annually to access tax relief benefits. This multi-layered approach to tax relief demonstrates Tennessee’s commitment to making retirement affordable.

How Tennessee Compares to Other Southern States

While Tennessee stands out, several other southern states also offer attractive tax conditions for retirees, though often with more complex rules. Understanding these comparisons helps illustrate why Tennessee’s approach is notably straightforward.

Florida, like Tennessee, provides no state income tax and completely exempts Social Security income from taxation. Additionally, Florida offers property tax exemptions—$25,000 from assessed home value for all homeowners, with an additional $50,000 exemption available to residents over 65. However, Florida’s popularity means higher costs of living in many areas.

Mississippi has joined the increasingly tax-friendly category by exempting Social Security benefits, pensions, IRAs, and 401(k) withdrawals from state taxation. The state also features extremely low sales taxes and maintains no estate or inheritance tax, making it attractive for wealth preservation.

Alabama, Arkansas, Georgia, Kentucky, and Louisiana all exempt Social Security income, though they impose varying levels of taxation on other retirement income sources. Each offers specific deductions or exemptions for pension income or retirement account withdrawals, requiring retirees to understand state-specific rules.

States like Virginia, West Virginia, North Carolina, Oklahoma, and South Carolina fall into the middle category, exempting Social Security while offering various deductions on other retirement income. West Virginia particularly noteworthy: as of 2026, the state has fully phased out Social Security taxation after a multi-year transition period, now offering complete exemption.

Beyond Social Security: Tennessee’s Additional Retirement Benefits

While the Social Security exemption is the cornerstone of Tennessee’s appeal, the state provides other financial advantages. The low property tax burden—among the lowest in the nation—means retirees can maintain homeownership affordably. The Property Tax Relief Program mentioned above can provide additional support for those meeting income requirements.

The state’s general sales tax, while higher than some states, is offset by the absence of income tax across all categories. This structure particularly benefits retirees living on fixed incomes, as they avoid the progressive taxation that working-age residents experience on wages.

Other Southern States Worth Considering

For those still exploring options, Georgia offers competitive benefits: residents aged 62-64 can exclude $35,000 in retirement income, while those 65 and older can exclude $65,000. Single filers earning less than $65,000 pay virtually no retirement income taxes under Georgia’s system.

Kentucky exempts all Social Security income and allows up to $31,110 in pension, 401(k), and IRA withdrawals annually without taxation. Combined with low property and sales taxes, Kentucky remains an attractive option for budget-conscious retirees.

Oklahoma retirees enjoy Social Security exemption plus a $10,000 deduction on other retirement income, low property taxes, and no estate or inheritance tax. The state’s “tax freeze” program—available to those over 65 earning less than $85,300—can permanently lock property tax valuations.

Planning Your Retirement in Tennessee or Beyond

Selecting a retirement location involves more than just tax rates. Consider the total cost of living, healthcare availability, climate preferences, and proximity to family. However, taxes represent one of the most controllable and quantifiable factors in retirement planning.

For those prioritizing tax efficiency, Tennessee’s combination of complete Social Security tax exemption, no state income tax, and low property taxes creates a compelling case. The state’s straightforward tax structure—lacking the complex deductions and limitations found in many neighboring states—makes financial planning more predictable.

If Tennessee’s climate or community doesn’t align with your preferences, alternatives like Florida, Mississippi, and Alabama offer comparable or equally favorable tax treatment. West Virginia, with its newly complete Social Security exemption as of 2026, has also entered the top tier of tax-friendly retirement destinations.

The bottom line: Tennessee does not tax Social Security, and combined with broader tax advantages, it remains among the most tax-efficient choices for southern retirees. Taking time to understand these state-level benefits can translate into meaningful long-term financial gains for your retirement years.