States with no tax on Social Security: In 2023, payments from Social Security were not taxed in 41 states and the DC. Colorado used to tax benefits for people younger than 65, but they have now gotten rid of this tax. In most of the U.S., this means that people who get Social Security benefits, especially seniors, don’t have to pay state income tax on them. This makes it easier for retirees to handle their money.
States with no tax on Social Security
The following states exempt Social Security benefits from taxes:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Mississippi
- Missouri
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- South Carolina
- South Dakota
- Tennessee
- Texas
- Virginia
- Washington
- District of Columbia
- Wisconsin
- Wyoming
Each state that taxes Social Security benefits has its own rates, rules about what benefits are taxed, and minimum income levels.
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In states that tax Social Security payments, these are the income tax rates for people who get them:
- Connecticut: 3 to 6.99%
- Minnesota: 5.35 to 9.85%
- Montana: 1 at 6.75%
- New Mexico: 1.7 to 5.9%
- Rhode Island: 3.75 to 5.99%
- Utah: 4.95%
- Vermont: 3.35 to 8.75%
- West Virginia: 3 to 6.5%
Many people rely on Social Security to help pay for their expenses after they retire. They pay into Social Security while they work, hoping to get enough money when they stop working.
However, Social Security benefits are taxed. This means that after the government takes its share, the amount you actually receive could be less. Generally, only people with very low incomes don’t have to pay taxes on Social Security. Most people pay taxes on half of their benefits, and those with higher incomes might pay taxes on up to 85% of their benefits.
The Social Security Administration states that if the following conditions are satisfied, 50% of a taxpayer’s payments may be subject to taxation:
- You file as a single taxpayer, head of household, or qualified widow/widow with income of $25,000 to $34,000.
- You are separated from your spouse for the entire tax year and have income of $25,000 to $34,000.
- You are married filing jointly with income of $32,000 to $44,000.
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A taxpayer’s profits could be subject to taxes of up to 85% if:
- You file as a single taxpayer, head of household, or qualified widow/widow with income over $34,000.
- You are married filing jointly with income over $44,000.
- You are separated from your spouse for the entire tax year and have income greater than $34,000.
- You are married filing separately and lived with your spouse at any time during the tax year.
If someone who gets Social Security benefits doesn’t live in a state that doesn’t tax Social Security benefits, they have to pay federal taxes plus any state taxes that apply, plus the District of Columbia taxes.
