State Taxation of Social Security Benefits: Which States Tax and How?

While federal tax rules for Social Security apply to all US residents, different states have different tax rules to consider. For example, in some states, Social Security benefits may be totally exempt from taxation, while in others, they may be fully taxed or only partially taxed, with different credits, deductions, and subtractions to consider.

This guide will cover the various state tax rules for Social Security benefits and how they can impact your retirement income.

Which States Tax Social Security Benefits?

Currently, a total of 12 states tax Social Security benefits, although the rules vary by state. Let’s review state-by-state:

1. Colorado: Colorado only taxes Social Security benefits for taxpayers under the age of 65. The state also allows those aged 55 to 64 to subtract up to $20,000 of taxable pension/annuity income (including Social Security benefits) from their taxable income.1 Colorado has a flat 4.40% income tax rate.2
2. Connecticut: Connecticut charges income taxes on Social Security benefits for taxpayers with adjusted gross incomes (AGIs) over $75,000 if filing single or $100,000 if married and filing jointly. However, the state does allow you to exempt up to 75% of your Social Security benefits, depending on your income. Below those AGI levels, there are no taxes due on your Social Security benefits.3 Connecticut income tax rates range from 3.0% to 6.99%, depending on income.4
3. Kansas: Kansas does not tax Social Security benefits for anyone with an AGI of $75,000 or less, regardless of filing status.5 For those with AGIs over $75,000, Social Security benefits are fully taxable at the same rates as all other income—from 3.1% to 5.7%, depending on income.6
4. Minnesota: Minnesota follows the federal rules for Social Security taxation and includes an additional state-specific subtraction based on income and filing status. The Minnesota-specific subtraction ranges from $2,725 to as high as $5,450, depending on income and filing status.7 Minnesota tax rates range from 5.35% to 9.85%.8
5. Missouri: Missouri does not tax Social Security if you are over the age of 62 and have an AGI below $85,000 for single filers or $100,000 for married filers. Above those income limits, taxpayers may still qualify for a partial exemption, depending on their income.9 Missouri tax rates range from 0% to 5.3%.10
6. Montana: Similar to the federal government, Montana does not tax Social Security for individuals with incomes below $25,000 for single filers and $32,000 for a married couple filing jointly.11 However, above those income amounts, Montana has its own formula to determine the taxable portion of your Social Security using a worksheet on the state tax form. For any taxable Social Security benefits, rates range from 1% to 6.75%.12
7. Nebraska: Nebraska is on track to eliminate all state taxes on Social Security benefits between now and 2025 as part of new legislation starting in January of 2022. That said, for 2022, if your AGI is above $61,760 for joint filers or $45,790 for single filers, a portion of your benefit will be taxable.13 Nebraska tax rates range from 2.46% to 6.84%.14
8. New Mexico: New Mexico does not tax Social Security benefits for those with AGIs under $100,000 for an individual or $150,000 for joint filers, surviving spouses, and heads of household.15 Above those limits, New Mexico’s income tax rates range from 1.7% to 5.9%.16
9. Rhode Island: Rhode Island does not tax Social Security benefits for those who have reached full retirement age (FRA) with AGIs below $95,800 for single filers or $119,750 for married filing jointly.17 For those who have not reached FRA or with AGIs over those limits, Rhode Island tax rates range from 3.75% to 5.99%.18
10. Utah: Utah matches the federal tax rules for Social Security, allowing individuals to exclude up to 15%, 50%, or 100% of their Social Security benefit from state tax, depending on income. But Utah also offers an additional state tax credit, depending on your AGI. For 2023, single filers with AGIs under $45,500 and joint filers under $75,000 can receive a full tax credit for their Social Security benefits. Above those AGI levels, taxpayers can receive a partial credit that’s reduced by 25 cents for each dollar over the income limit.19 Utah has a flat 4.65% tax rate.20
11. Vermont: Vermont allows certain taxpayers to exclude part or all of their Social Security benefits from state taxes, depending on income and filing status. For 2022, single filers with AGIs below $50,000 and joint filers with AGIs below $65,000 can exclude all of their Social Security benefits from state income taxes. Above those AGIs, the exemption is slowly phased out until AGIs of $60,000 and $75,000 for single and joint filers, respectively.21 Vermont tax rates range from 3.35% to 8.75%.22
12. West Virginia: Lastly, for 2022, West Virginia does not charge any tax on Social Security benefits for taxpayers with AGIs below $50,000 for single filers and $100,000 for couples filing jointly. Above that, West Virginia uses the federal calculation to determine how much of your Social Security benefit is taxable.23 West Virginia income tax rates range from 2.36% to 5.12%.24

As you can see, each of these 12 states has its own unique tax laws when it comes to Social Security benefits. It’s important to understand your state’s specific rules and regulations in order to properly plan for taxes in retirement. While some states may have more favorable tax rates, others may not offer any exemptions or deductions for Social Security income at all. 

Additionally, these tax laws are subject to change and income limits are constantly updated, so it’s always important to stay informed and consult with a tax professional for specific advice.

Which States Don’t Tax Social Security Benefits?

Now that we’ve covered which states tax Social Security benefits and the specific rules for each let’s quickly cover which states don’t tax Social Security at all. The following states do not tax Social Security benefits:

1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. California
6. Delaware
7. Florida
8. Georgia
9. Hawaii
10. Idaho
11. Illinois
12. Indiana
13. Iowa
14. Kentucky
15. Louisiana
16. Maine
17. Maryland
18. Massachusetts
19. Michigan
20. Mississippi
21. Nevada
22. New Hampshire
23. New Jersey
24. New York
25. North Carolina
26. North Dakota
27. Ohio
28. Oklahoma
29. Oregon
30. Pennsylvania
31. South Carolina
32. Tennessee
33. Texas
34. Virginia
35. Washington
36. Wisconsin
37. Wyoming
38. The District of Columbia

In The End

Navigating your financial future can be complex, but understanding how your Social Security benefits are taxed is a key part of the puzzle. The list of states we’ve provided will help you make an informed decision when planning your retirement finances.

Sources:

1. “Individual Income Tax | Information for Retirees.” Colorado Department of Revenue, tax.colorado.gov/retirees. Accessed 2 Oct. 2023.
2. “Individual Income Tax | Frequently Asked Questions.” Colorado Department of Revenue, tax.colorado.gov/individual-income-tax-FAQ. Accessed 2 Oct. 2023.
3. Poole, Heather. “Income Tax Exemptions for Retirement Income.” Connecticut Department of Revenue Services, 6 Jul. 2023, www.cga.ct.gov/2023/rpt/pdf/2023-R-0129.pdf. Accessed 2 Oct. 2023.
4. Pinho, Rute. “OLR Backgrounder: A Guide to Connecticut’S Personal Income Tax.” Connecticut Department of Revenue Services, 21 Jun. 2022, www.cga.ct.gov/2022/rpt/pdf/2022-R-0108.pdf. Accessed 2 Oct. 2023.
5. “Frequently Asked Questions About Individual Income: Are Social Security Benefits Taxable to Kansas?” Kansas Department of Revenue, www.ksrevenue.gov/faqs-taxii.html. Accessed 2 Oct. 2023.
6. “Selected Kansas Tax Rates with Statutory Citation: Individual Income Tax.” Kansas Department of Revenue, www.ksrevenue.gov/taxrates.html. Accessed 2 Oct. 2023.
7. “Social Security Benefit Subtraction.” Minnesota Department of Revenue, 20 Jan. 2023, www.revenue.state.mn.us/social-security-benefit-subtraction. Accessed 2 Oct. 2023.
8. “Income Tax Rates and Brackets.” Minnesota Department of Revenue, 29 Nov. 2022, www.revenue.state.mn.us/minnesota-income-tax-rates-and-brackets. Accessed 2 Oct. 2023.
9. “2022 Missouri Income Tax Reference Guide.” Missouri Department of Revenue, 1 Jan. 2022, dor.mo.gov/forms/4711_2022.pdf. Accessed 2 Oct. 2023.
10. “What’s New?: 2023 Legislative Session.” Missouri Department of Revenue, dor.mo.gov/taxation/individual/tax-types/income/year-changes/. Accessed 2 Oct. 2023.
11. “Montana State Self-Help Knowledge Base.” Montana Department of Revenue, mtrevenue.gov/?mdocs-file=55887. Accessed 2 Oct. 2023.
12. “Individual Income Tax Rates and Tables.” Montana Department of Revenue, montana.servicenowservices.com/citizen?id=kb_article_view&sysparm_article=KB0014487. Accessed 2 Oct. 2023.
13. “2022 Nebraska Legislative Changes.” Nebraska Department of Revenue, revenue.nebraska.gov/about/2022-nebraska-legislative-changes. Accessed 2 Oct. 2023.
14. “Nebraska Revised Statute 77-2715.03.” Nebraska Legislature, nebraskalegislature.gov/laws/statutes.php?statute=77-2715.03. Accessed 2 Oct. 2023.
15. “Gov. Michelle Lujan Grisham Eliminates Tax on Social Security.” Taxation & Revenue New Mexico, www.tax.newmexico.gov/social-security-income-tax-exemption/. Accessed 2 Oct. 2023.
16. “PERSONAL INCOME TAX RATES FOR TAX YEAR 2005.” Taxation & Revenue New Mexico, www.tax.newmexico.gov/individuals/wp-content/uploads/sites/5/2021/12/PIT-rates_2005_2021.pdf. Accessed 2 Oct. 2023.
17. “RHODE ISLAND PERSONAL INCOME TAX GUIDE: MODIFICATION FOR INCOME FROM PENSIONS, 401(K) PLANS, ANNUITIES, AND OTHER SUCH SOURCES.” Rhode Island Department of Revenue Division of Taxation, 12 Apr. 2023, tax.ri.gov/sites/g/files/xkgbur541/files/2023-04/PUB_2023-01_pension_income_guide.pdf. Accessed 2 Oct. 2023.
18. “RHODE ISLAND TAX RATE SCHEDULE 2022.” Rhode Island Department of Revenue Division of Taxation, tax.ri.gov/sites/g/files/xkgbur541/files/2022-10/2022%20RI%20Tax%20Tables_Complete.pdf. Accessed 2 Oct. 2023.
19. “Section 1042 Nonrefundable Tax Credit for Social Security Benefits. (Effective 5/3/2023).” Utah State Legislator, le.utah.gov/xcode/Title59/Chapter10/59-10-S1042.html. Accessed 2 Oct. 2023.
20. “Tax Rates.” Utah Income Taxes, incometax.utah.gov/paying/tax-rates. Accessed 2 Oct. 2023.
21. “Social Security Exemption.” Vermont Department of Revenue, tax.vermont.gov/individuals/income-tax-returns/social-security-exemption. Accessed 2 Oct. 2023.
22. “Vermont Rate Schedules and Tax Tables.” Vermont Department of Revenue, tax.vermont.gov/individuals/personal-income-tax/rates. Accessed 2 Oct. 2023.
23. “ARTICLE 21. PERSONAL INCOME TAX.” West Virginia Legislature, www.wvlegislature.gov/wvcode/code.cfm?chap=11&art=21. Accessed 2 Oct. 2023.
24. “2023 Income Tax Rate Cut and Property Tax Rebate.” West Virginia Tax Division, tax.wv.gov/Individuals/Pages/PersonalIncomeTaxReductionBill.aspx. Accessed 2 Oct. 2023.