Nine states still tax social security benefits in 2024, which is thankfully down from eleven states in 2023. Depending on where you live, that could significantly impact your retirement dollars and financial planning.
Knowing if your state taxes Social Security benefits is a crucial detail. Here’s what that could mean for your retirement, state by state.
Tax Rates
The amount of state taxes paid on Social Security benefits varies greatly. Age, adjusted gross income (AGI), and tax filing status are all factors depending on your state. To get up-to-date details, talk with a local tax professional.
Missouri
Missouri Governor Mike Parsons signed legislation in 2023 that exempted all Social Security benefits from income tax as of January 1, 2024. Prior to that, taxpayers got an exemption if they were at least 62 with incomes below $85,000 or $100,000 if married filing jointly.
Nebraska
Nebraska also got rid of its Social Security tax for 2024, with Governor Jim Pillen signing it into law effective January 1, 2024. In 2023, Social Security benefits were taxable if your AGI was over $45,790 or $61,760 if married filing jointly.
Colorado
As long as you are over 65, Colorado exempts Social Security benefits from state income tax. However, early retirees under age 65 get taxed on their Social Security benefits. Only the first $20,000 of Social Security benefits for those between 55 and 65 years of age are not taxable.
Connecticut
In Connecticut, if your AGI (adjusted gross income) is over $75,000 or $100,000 filing jointly, your social security benefits will be taxed.
Kansas
Similar to Connecticut, if your AGI is over $75,000, Social Security benefits are subject to Kansas state income tax.
Minnesota
Minnesota taxes Social Security benefits for people with AGIs over $78,000, or $100,000 if married filing jointly.
Taxpayers with incomes above those thresholds may still get a partial exemption (the tax break phases out at a rate of 10% for each $4,000 of AGI over the threshold).
Montana
Montana taxes Social Security benefits at one of the lowest income thresholds. Residents with AGI’s above $25,000 or $32,000 for joint filers can expect to be taxed.
New Mexico
New Mexico taxes Social Security benefits for taxpayers with more than $100,000 in income, $75,000 if married filing separately, or $150,000 if a surviving spouse, head of household, or married filing jointly.
Rhode Island
If you begin taking Social Security before reaching Social Security’s full retirement age of 67, Rhode Island taxes you. Additionally, if your AGI is over $95,800 or $119,750 for married filing jointly, Social Security is taxed.
People under those thresholds can exempt up to $15,000 of their retirement income.
Utah
Utah is another state that taxes Social Security benefits for taxpayers with relatively low AGI’s. Those making over $45,000 or $75,000 if head of household or married filing jointly; $37,500 if married filing separately will be taxed on Social Security benefits.
However, those under those thresholds may qualify for a non-refundable tax credit.
Vermont
Vermont taxes Social Security for taxpayers with AGIs above $60,000 or $75,000 if married filing jointly. People with AGIs between $50,000 and $59,999 ($65,001 and $74,999 if married filing jointly) get a partial exemption.
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