Social Security benefits are subject to federal income tax, as long as the total income exceeds the limit set by the federal government. According to the Administration of Social Security (SSA) recipients will pay taxes on 50 or 85 percent of the payments, depending on their amount of income.
Those who present their return as “individuals” will pay income taxes on up to 50 percent of their Benefits if your combined income is between $25,000 and $34,000 dollars. If the statement is jointly with the spouse, combined income it rises to between $32,000 and $44,000.
The percentage it goes up to 85 percent of benefits if combined income is over $44,000. However, there are certain states that tax some or all of their residents’ retirement benefits regardless of the amount of income; while others simply don’t.
Tax Return 2023: Which states do not tax retirement savings and why?
State Policies on Taxes on Retiree Benefits vary widely, since each state has the right to determine whether they follow federal rules for determining how much income is or is not subject to tax.
Currently, they are There are 39 states in the United States that do not tax Social Security benefits. These states are: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin y Wyoming. The D.C. is also on the list.
Regarding retirement savings or other types of pensions, only nine states do not levy taxes, which are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
