diff --git a/internal/terraform/context_plan.go b/internal/terraform/context_plan.go
index fc2e0be61691..7ccd79fb8284 100644
--- a/internal/terraform/context_plan.go
+++ b/internal/terraform/context_plan.go
@@ -643,6 +643,12 @@ func (c *Context) planGraph(config *configs.Config, prevRunState *states.State,
 	}
 }
 
+// driftedResources is a best-effort attempt to compare the current and prior
+// state. If we cannot decode the prior state for some reason, this should only
+// return warnings to help the user correlate any missing resources in the
+// report. This is known to happen when targeting a subset of resources,
+// because the excluded instances will have been removed from the plan and
+// not upgraded.
 func (c *Context) driftedResources(config *configs.Config, oldState, newState *states.State, moves refactoring.MoveResults) ([]*plans.ResourceInstanceChangeSrc, tfdiags.Diagnostics) {
 	var diags tfdiags.Diagnostics
 
@@ -690,35 +696,35 @@ func (c *Context) driftedResources(config *configs.Config, oldState, newState *s
 					addr.Resource.Resource.Type,
 				)
 				if schema == nil {
-					// This should never happen, but just in case
-					return nil, diags.Append(tfdiags.Sourceless(
-						tfdiags.Error,
+					diags = diags.Append(tfdiags.Sourceless(
+						tfdiags.Warning,
 						"Missing resource schema from provider",
-						fmt.Sprintf("No resource schema found for %s.", addr.Resource.Resource.Type),
+						fmt.Sprintf("No resource schema found for %s when decoding prior state", addr.Resource.Resource.Type),
 					))
+					continue
 				}
 				ty := schema.ImpliedType()
 
 				oldObj, err := oldIS.Current.Decode(ty)
 				if err != nil {
-					// This should also never happen
-					return nil, diags.Append(tfdiags.Sourceless(
-						tfdiags.Error,
+					diags = diags.Append(tfdiags.Sourceless(
+						tfdiags.Warning,
 						"Failed to decode resource from state",
-						fmt.Sprintf("Error decoding %q from previous state: %s", addr.String(), err),
+						fmt.Sprintf("Error decoding %q from prior state: %s", addr.String(), err),
 					))
+					continue
 				}
 
 				var newObj *states.ResourceInstanceObject
 				if newIS != nil && newIS.Current != nil {
 					newObj, err = newIS.Current.Decode(ty)
 					if err != nil {
-						// This should also never happen
-						return nil, diags.Append(tfdiags.Sourceless(
-							tfdiags.Error,
+						diags = diags.Append(tfdiags.Sourceless(
+							tfdiags.Warning,
 							"Failed to decode resource from state",
 							fmt.Sprintf("Error decoding %q from prior state: %s", addr.String(), err),
 						))
+						continue
 					}
 				}
 
diff --git a/internal/terraform/context_plan2_test.go b/internal/terraform/context_plan2_test.go
index 634144dee048..65f743a39c06 100644
--- a/internal/terraform/context_plan2_test.go
+++ b/internal/terraform/context_plan2_test.go
@@ -1705,6 +1705,60 @@ The -target option is not for routine use, and is provided only for exceptional
 	})
 }
 
+func TestContext2Plan_untargetedResourceSchemaChange(t *testing.T) {
+	// an untargeted resource which requires a schema migration should not
+	// block planning due external changes in the plan.
+	addrA := mustResourceInstanceAddr("test_object.a")
+	addrB := mustResourceInstanceAddr("test_object.b")
+	m := testModuleInline(t, map[string]string{
+		"main.tf": `
+resource "test_object" "a" {
+}
+resource "test_object" "b" {
+}`,
+	})
+
+	state := states.BuildState(func(s *states.SyncState) {
+		s.SetResourceInstanceCurrent(addrA, &states.ResourceInstanceObjectSrc{
+			AttrsJSON: []byte(`{}`),
+			Status:    states.ObjectReady,
+		}, mustProviderConfig(`provider["registry.terraform.io/hashicorp/test"]`))
+		s.SetResourceInstanceCurrent(addrB, &states.ResourceInstanceObjectSrc{
+			// old_list is no longer in the schema
+			AttrsJSON: []byte(`{"old_list":["used to be","a list here"]}`),
+			Status:    states.ObjectReady,
+		}, mustProviderConfig(`provider["registry.terraform.io/hashicorp/test"]`))
+	})
+
+	p := simpleMockProvider()
+
+	// external changes trigger a "drift report", but because test_object.b was
+	// not targeted, the state was not fixed to match the schema and cannot be
+	// deocded for the report.
+	p.ReadResourceFn = func(req providers.ReadResourceRequest) (resp providers.ReadResourceResponse) {
+		obj := req.PriorState.AsValueMap()
+		// test_number changed externally
+		obj["test_number"] = cty.NumberIntVal(1)
+		resp.NewState = cty.ObjectVal(obj)
+		return resp
+	}
+
+	ctx := testContext2(t, &ContextOpts{
+		Providers: map[addrs.Provider]providers.Factory{
+			addrs.NewDefaultProvider("test"): testProviderFuncFixed(p),
+		},
+	})
+
+	_, diags := ctx.Plan(m, state, &PlanOpts{
+		Mode: plans.NormalMode,
+		Targets: []addrs.Targetable{
+			addrA,
+		},
+	})
+	//
+	assertNoErrors(t, diags)
+}
+
 func TestContext2Plan_movedResourceRefreshOnly(t *testing.T) {
 	addrA := mustResourceInstanceAddr("test_object.a")
 	addrB := mustResourceInstanceAddr("test_object.b")