Although Social Security benefits are taxable at the federal level, most recipients haven’t had to worry about paying state income taxes on their benefits.
That will be the case in 2024 as well, though residents in some states will face state taxes on Social Security.
These are the 11 states that tax Social Security benefits in 2023 and are expected to do the same in 2024: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont.
One thing to keep in mind is that the taxes you face will differ from one state to the next. As previously reported by GOBankingRates, the following states reduce Social Security taxes based on age or income:
-
- Connecticut: Retirees whose annual adjusted gross income is than $75,000 for a single filer and $100,000 for joint filers can deduct most or all of their benefit income in Connecticut. People who make more than these thresholds can still deduct 75% of Social Security benefit payments.
- Kansas: If your AGI is $75,000 or less, you don’t have to pay state taxes on your benefits in Kansas, no matter your filing status.
- Missouri: Although Social Security is taxable in Missouri, the tax does not apply to those who have an annual AGI of less than $85,000 (single filers/heads of household) or $100,000 (joint filers).
- Montana: For many retirees in Montana, Social Security is taxable. However, taxpayers who make less than $25,000 a year or ($32,000 for joint filers) can deduct all of their Social Security retirement income. Starting in 2024, Social Security benefits will be taxed in Montana as they are at the federal level.
- Nebraska. In the Cornhusker State, Social Security benefits are taxable on a sliding scale based on AGI. Those with incomes below $59,100 (for a married couple) and $44,460 (for an individual) do not have to pay state tax on their benefits. The state will phase out the state income tax on benefits by 2025.
- New Mexico. As of 2023, taxes on Social Security benefits in New Mexico have been phased out for individuals earning less than $100,000 a year and married people filing jointly who earn less than $150,000.
-
-
- Rhode Island: You don’t have to pay taxes on Social Security in Rhode Island if you’ve reached full retirement age and have an AGI hat falls below $86,350 (single filers/head of household) or $107,950 (joint filers).
- Vermont. Single filers with an AGI of $50,000 or less can receive full exemption from paying state taxes on their benefits. If you make between $50,000 and $60,000, you’re eligible for a partial exemption. For joint filers, you can get the full exemption at incomes of $65,000 or less and partial exemption for incomes between $65,000 and $75,000.
- Utah: The Beehive State recently adopted its own income-based tax credit system to offset Social Security income for single filers earning less than $30,000 a year and joint filers earning less than $50,000. Those who earn more than those thresholds can still get a partial exemption on their benefits. The tax credit is reduced by 25 cents for each dollar above the income thresholds mentioned above.
Residents of other states won’t have to worry about paying state income taxes on Social Security benefits in 2024. In fact, nine states don’t impose state income taxes at all:
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
-