States where you do not have to pay taxes on Social Security benefits
Find out in which areas of the country where your retirement income will have no tax deductions.
The District of Columbia and 41 states do not tax Social Security benefits. Colorado only taxed Social Security benefits received by residents under age 65, but starting in 2023, taxes are no longer collected on these benefits.
The states in which Social Security benefits are not taxed are the following:
- 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
For states where Social Security benefits are taxed, rates vary by state, as do exclusions and income limits that apply. These are the Social Security income tax rates in the states that do tax benefits:
- 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 benefits to finance their lifestyle after retirement. So, they make regular contributions while they are still working, expecting or hoping to receive checks that will be able to cover their monthly expenses when they finally decide to retire.
However, the amount workers receive from the Social Security Administration (SSA) may still go through some deductions after the Internal Revenue Service gets a piece of it, because Social Security benefits are taxable. Generally, only very low-income taxpayers escape the Social Security tax completely. The rest pay taxes up to half of the Social Security payment or, for those with higher incomes, up to 85% of it.
According to the Social Security Administration, 50% of a taxpayer’s benefits may be taxable if the following criteria are met:
- 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.
Meanwhile, up to 85% of a taxpayer’s profits may be taxable 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.
In addition to federal taxes, Social Security recipients must pay applicable state taxes if they do not live in one of the states that do not tax Social Security benefits, as well as the District of Columbia.