Your Social Security checks are essential for maintaining your independence during retirement. Having your own savings might not be enough to keep up with your current lifestyle if you lose your benefits. However, numerous retirees find themselves returning a part of their payments to the federal government.
Some seniors may have their Social Security benefits taxed by the IRS, based on their income levels. People living in these nine states might also have to pay state benefit taxes. If you meet specific criteria, you might not have to pay taxes on state benefits.
Nine States impose Taxes on Social Security Benefits
Taxing Social Security benefits at the state level has seen a decline in popularity in recent years. Here are the nine states that currently maintain these tax laws:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia
Just because you live in one of these areas doesn’t mean you’ll automatically have to give your state a portion of your earnings. Most of these states have regulations that allow specific filers to avoid paying state benefit taxes. This is typically determined by your adjusted gross income (AGI). If the amount is below a specific threshold, the state will not impose taxes on your benefits. This usually excludes those with low to moderate incomes. Reach out to your state’s tax department or consult a tax expert to find out if you might have any outstanding payments.
Residents of Colorado and West Virginia should be aware that there are updates to their state’s Social Security benefit tax laws in 2025. In Colorado, people between the ages of 55 and 64 who have adjusted gross incomes below $75,000 for individual filers or $90,000 for joint filers can exclude any federally taxable Social Security benefits from their state income. This rule has been in effect for individuals aged 65 and older in previous years.
In 2025, West Virginians earning over $50,000 as individuals or $100,000 as joint filers will see 65% of their Social Security benefits exempt from state tax, an increase from 35% in 2024. Individuals with AGIs below the specified thresholds are not subject to state benefit taxes. Starting in 2026, the state will also exempt all Social Security benefits from its income tax.
Taxation on Federal Social Security benefits affects residents across every state.
While fewer states are taxing Social Security benefits these days, it’s increasingly common for the federal government to tax these benefits. The taxation thresholds have remained the same for more than 30 years.
Reference: Retirees in These 9 States Risk Losing Some of Their Social Security Checks
Leave a Reply