Some states do tax Social Security benefit income. These income Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. Minimizing tax liabilities should be a key part of your Social Security strategy. If you live in one of these states, give some thought to relocating to a state that doesn’t tax your Social Security income. If you relocate to a state with lower state and property taxes, you’ll have more of your Social Security benefits to spend during your retirement.