Taxing the Poor: 11 States That Tax Social Security Benefits

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11 states tax Social Security benefits in 2023. That drops to nine states in 2024. Depending on where you live, that could 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, depending on where you live.

Taxes

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The amount of state taxes paid on Social Security benefits varies greatly. Age, adjusted gross income (AGI), and tax filing status are all factors. To get up-to-date details, talk with a local tax professional. 

Colorado

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Taxpayers under 65 get taxed on their Social Security benefits by the end of the tax year. The first $20,000 of Social Security benefits for those between 55 and 65 years of age are not taxable.

Connecticut 

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If your AGI is over $75,000 or $100,000 filing jointly, your benefits will be taxed.

Kansas

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Similar to Connecticut, if your AGI is over $75,000, Social Security benefits are taxed.

Minnesota

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Minnesota taxes Social Security benefits for people with AGIs over $78,000, $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).

Missouri

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Missouri will stop taxing Social Security benefits in 2024. For 2023, taxpayers get an exemption if they are at least 62 and have incomes below $85,000 or $100,000 if married filing jointly. 

Montana

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Montana taxes Social Security benefits at one of the lower income thresholds. Residents with AGI’s above $25,000 or $32,000 for joint filers can expect to be taxed. 

Nebraska

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Nebraska taxes Social Security in 2023 but will stop doing so in 2024. In 2023, Social Security benefits are taxable if your AGI is over $45,790 or $61,760 if married filing jointly.

New Mexico

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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

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If you begin taking Social Security before reaching Social Security’s full retirement age of 67, Rhode Island state 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

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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

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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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Meredith Hutchings

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