41 States to Exempt Social Security Benefits from Taxation in 2024: Throughout their careers, Americans contribute to Social Security funds via payroll taxes. Upon retirement, individuals will no longer need to make contributions. Instead, they will start receiving funds from the Social Security Administration, as long as they meet the required criteria.
It would seem that since they have already remitted taxes on their prior earnings, they would not be responsible for additional deductions from their Social Security benefits. However, about half of the recipients currently have to pay federal taxes on their social security benefits, which shows that this perception is incorrect.
In contrast, tax regulations vary considerably from state to state within the United States. Nine states, in addition to thirty-two other states and the District of Columbia, do not levy an income tax on Social Security benefits.
Nine states continue to levy income taxes on Social Security benefits, albeit with variations in the manner in which they are calculated.
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The IRS levies what amount of tax on Social Security benefits?
According to the SSA, the following circumstances may result in 50% of a taxpayer’s benefits being taxable:
- You file as a single taxpayer, head of household, or qualified widow or widow with an income of $25,000 to $34,000.
- You are separated from your spouse for the entire tax year and have an income of $25,000 to $34,000.
- You are married and filing jointly with an income of $32,000 to $44,000.
The tax rate on benefits increases to 85 percent if:
- You file as a single taxpayer, head of household, or qualified widow or widow with an income over $34,000.
- You are married and filing jointly with an income over $44,000.
- You are separated from your spouse for the entire tax year and have an income greater than $34,000.
- You are married, filed separately, and lived with your spouse at any time during the tax year.
In 2024, 41 states will not impose taxes on Social Security benefits.
State taxes are levied in addition to federal taxes on Social Security recipients, except those residing in one of the 41 states or the District of Columbia that have ceased taxing Social Security benefits. A bill enacted into law in Missouri in July 2023 eliminates the income tax on Social Security benefits, becoming the most recent state to do so. Social Security benefits were exempt from taxation in Nebraska beginning in 2022 and will remain so until 2024.
- Alabama
- Alaska (no income tax)
- Arizona
- Arkansas
- California
- Colorado* (only those 65 and older)
- Delaware
- Florida (no income tax)
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Mississippi
- Missouri (2024 first-year benefits not taxed)
- Nebraska (2024 first-year benefits not taxed)
- Nevada (no income tax)
- New Hampshire (no income tax)
- New Jersey
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- South Carolina
- South Dakota (no income tax)
- Tennessee (no income tax)
- Texas (no income tax)
- Virginia
- West Virginia
- Washington (no income tax)
- Washington DC.
- Wisconsin
- Wyoming (no income tax)
Which counties tax Social Security benefits?
The rate of taxation varies among the nine jurisdictions that levy taxes on Social Security payments received by beneficiaries in 2024.
- Colorado (only those under 65): flat 4.4%
- Connecticut: 3 to 6.99%
- Kansas: 3.1 to 5.7%
- Minnesota: 5.35 to 9.85%
- Missouri: 0 to 5.4% (2023 last year benefits taxed for incomes over $85K, individuals and $100K joint filers)
- Montana: 1 at 6.75%
- Nebraska: 2.46 to 6.84% (2023; last year’s benefits will be taxed)
- New Mexico: 1.7 to 5.9%
- Rhode Island: 3.75 to 5.99%
- Utah: 4.95%
- Vermont: 3.35 to 8.75%
The Social Security recipient’s total income determines the rate at which benefits are computed. Inversely proportional to income, the rate increases.
Requirements for Children to Receive Social Security Income (SSI)
