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Which states tax Social Security benefits?


A portion of Social Security retirement, disability and other benefits are subject to federal income tax if your overall income exceeds a cap the U.S. government sets. Twelve states also tax some or all of their residents’ Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont and West Virginia. (Missouri and Nebraska are ending taxation of benefits with the 2024 tax year.)

State policies on taxing benefits vary widely. Some follow the federal rules for determining how much of a beneficiary’s Social Security income is taxable: none for people with provisional income below $25,000 for a single filer and $32,000 for a couple filing jointly, up to 85 percent at higher income levels. (Provisional income is adjusted gross income, or AGI, plus tax-exempt interest income, plus one-half of Social Security benefit income.) 

Other states offer their own deductions or exemptions based on age or income, and a few are reducing or eliminating taxation of benefits for most or all older residents. Here’s what to expect if you live in a state that taxes Social Security.

Colorado

Coloradans ages 65 and older can fully deduct Social Security benefits from their state income. Previously, people in this age group could only deduct up to $24,000 in retirement income, including Social Security payments, but a 2021 state law repealed that cap.

Younger beneficiaries may still owe state taxes on a portion of their benefits. Those ages 55 to 64 and receiving Social Security can deduct up to $20,000 in retirement income, including Social Security payments. For this group, retirement income above that level is taxable at the state’s flat rate of 4.4 percent. 

For more information, contact the Colorado Department of Revenue.

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Connecticut

State residents can deduct most or all of their benefit income, depending on their AGI, the figure on line 11 of the IRS 1040 form.

Single beneficiaries who report an AGI of less than $75,000 and married couples whose AGI is below $100,000 pay no state taxes on their benefits. If your income exceeds those thresholds, you get a partial exemption, but no more than 25 percent of your Social Security benefits can be taxed. 

Connecticut’s income-tax rate ranges from 3 percent to 6.99 percent. For more information, contact the Connecticut Department of Revenue Services.

Kansas

Kansans whose AGI is $75,000 or less are fully exempt from paying state taxes on Social Security. The cap applies for all filing statuses. Beyond that threshold, benefits are taxed at the same rate as other income, which in Kansas ranges from 3.1 percent to 5.7 percent.

For more information, contact the Kansas Department of Revenue

Minnesota

As of the 2023 tax year, Minnesotans with AGIs of up to $78,000 for an individual and up to $100,000 for a couple filing jointly do not have to pay state taxes on their Social Security income. Residents with higher incomes — up to $118,000 for a single filer and $140,000 for couples — may qualify for a partial tax break on their benefits.

In past years the state used a different calculation, called the Social Security Subtraction, to determine taxes on benefits. Residents may still opt for this method, which, like the federal calculation, is based on provisional income. For 2023 taxes, single filers using this method can exclude up to $4,560 of their federally taxable benefits from state taxation if their provisional income is $78,000 or less. For couples, the income threshold is $100,000 and the maximum subtraction is $5,840.

For more information, contact the Minnesota Department of Revenue.

Missouri

Missouri is ending taxation of Social Security benefits, starting with the 2024 tax year.

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For 2023 tax returns, benefits are fully deductible for residents ages 62 and older with an AGI of less than $85,000 (single) or $100,000 (married, filing jointly). If you earn more, you may still be eligible for a partial deduction.

Missouri’s income-tax rates range from 0 percent to 4.95 percent. For more information, contact the Missouri Department of Revenue.

Montana

Like the federal government, Montana does not tax Social Security for people with overall incomes of less than $25,000 for a single filer and $32,000 for a couple filing jointly. Residents who make more are liable for tax on their benefits, but the state uses a different method than the feds to determine the taxable amount. The state tax form includes a worksheet for calculating the difference.

Montana’s income-tax rates range from 1 percent to 6.75 percent. The top rate will drop to 5.9 percent in the 2024 tax year. For more information, contact the Montana Department of Revenue.

Nebraska

Nebraska is ending taxation of Social Security benefits, starting with the 2024 tax year. The state had been set to eliminate taxation of benefits in 2025, but legislation passed in May 2023 moved the target date up a year.

For the 2023 tax year, benefits are fully exempt for Nebraskans with an AGI below $61,760 for a couple filing jointly or $45,790 for a single filer. Above those levels, beneficiaries can deduct 60 percent of their Social Security income.

Nebraska taxes income at rates of 2.46 percent to 6.84 percent. The top rate is set to decline in stages to 3.99 percent by 2027. For more information, contact the Nebraska Department of Revenue.

New Mexico

A 2022 state law eliminated taxation of benefits for most New Mexicans. Social Security income is fully deductible for residents with AGIs below $100,000 for an individual and $150,000 for a couple filing jointly. 

New Mexico taxes income at rates from 1.7 percent to 5.9 percent. For more information contact the New Mexico Taxation & Revenue Department.

Rhode Island

The state does not tax benefits for people who have reached full retirement age as defined by the Social Security Administration (between 66 and 67, depending on year of birth) and have an AGI below $126,250 for a couple filing jointly or $101,000 for a single filer or head of household. If you have not reached full retirement age, or have and your income exceeds those thresholds, your benefits are taxable.

Rhode Island taxes income at rates ranging from 3.75 percent to 5.99 percent. For more information, contact the Rhode Island Department of Revenue’s Division of Taxation.

Utah

Utah uses the federal formula to calculate how much Social Security income is taxable at the state tax rate, which is 4.65 percent, but the state offers a full or partial credit on those taxable benefits. 

Married couples filing jointly and heads of households reporting 2023 income of $75,000 or less, and singles making $45,000 or less, qualify for a full tax credit on their benefit income. Those earning more can still get a partial break on their benefits, with the tax credit reduced by 25 cents for each dollar above the income thresholds above.

For more information, contact the Utah State Tax Commission.

Vermont

Vermont lawmakers voted in 2022 to raise the income threshold for exempting Social Security benefits from state taxes. Single filers with an AGI of $50,000 or less now qualify for a full exemption from paying state taxes on their benefits. Those who make between $50,000 and $60,000 are eligible for a partial exemption. 

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For married couples filing jointly, the full exemption applies at incomes of $65,000 or less. The exemption is phased out at incomes between $65,000 and $75,000.

For single filers earning $60,000 or more and couples making $75,000 or more, benefits are fully taxed at the state rate, which ranges from 3.35 percent to 8.75 percent. For more information, contact the Vermont Agency of Administration’s Department of Taxes.

West Virginia

West Virginia taxes Social Security income according to the federal model for residents with adjusted gross income above $50,000 for single taxpayers and $100,000 for couples filing jointly. Those with AGIs below those levels can fully deduct their benefits. 

West Virginia’s income-tax rates range from 2.36 percent to 5.12 percent. For more information, contact the West Virginia State Tax Department.

Keep in mind

None of the above applies to Supplemental Security Income, a monthly benefit for people who are 65-plus or have a disability or vision loss and have very low incomes and limited assets. SSI, which is administered by the Social Security Administration, is not subject to income taxes.

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