In most U.S. states, retirees only pay federal taxes on their Social Security benefits. However, in nine states, residents still pay a percentage in retirement based on the income they earn and where they live.
However, in places where benefits are still taxable, not everyone is required to pay. Remember that the number of people eligible for exemptions has continued to grow across the country.
A growing number of states have eliminated Social Security taxes for most of their residents.
Two states, Kansas and Nebraska, passed measures this year that added them to the number of states where taxes are paid on benefits.
Meanwhile, in West Virginia, taxes will cease in the medium term, although it will not happen suddenly.
States with Social Security taxes
Colorado
The state taxes all income at a rate of 4.4%, which includes Social Security benefits.
Minnesota
Taxpayers who earn less than $78,000 USD in adjusted gross income or $100,000 USD as a married couple can subtract their Social Security benefits.
Montana
Montana residents who earn more than $41,000 if filing jointly or $20,500 if filing single pay a 5.9% tax.
New Mexico
A bill was passed there that eliminates taxes on Social Security benefits. This applies to residents who earn less than $100,000 USD or couples who earn less than $150,000 USD per year. For married couples filing separately, the income cap is set at $75,000 USD per year.
Rhode Island
Rhode Island does not tax Social Security benefits for residents who have reached full retirement age. This applies to those with adjusted gross incomes of less than $95,800 for single filers or $119,750 for residents filing jointly.
Utah
Utah has a flat tax rate of 4.55% for all income levels. Single taxpayers can get Social Security tax credits if they have adjusted gross income of $37,000 USD. Meanwhile, married residents can get Social Security tax credits if they have adjusted gross income of $37,000 USD. For those filing separately, the threshold is $31,000 USD. Finally, for those filing jointly, the threshold is $62,000 USD.
Vermont
Vermont allows a tax exemption on Social Security benefits to residents who meet income requirements.
For married people With joint tax returns, Social Security benefits are tax-free if your adjusted gross income is $65,000 USD or less.
Virginia Occidental
West Virginians still pay taxes on Social Security benefits. However, taxes will be phased out over the next three years.
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