No state taxes Social Security benefits the way the federal government does
Thirteen states tax Social Security income, but most states do not. The states that do tax it are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. However, even in these states, you may not owe tax on your benefits — most have exemptions based on your age, income level, or both.
If you live in any other state, your state will not tax your Social Security benefits at all. This is a significant difference from federal income tax, which does explore to benefits for many people. Understanding your own state's rules matters because it affects how much of your benefit you actually keep each month.
Key Takeaways
- Thirteen states tax Social Security benefits in some form: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.
- Most of these states exempt people over a certain age (usually 59 or 62) or those with income below a threshold, so you may not owe tax even if you live there.
- The remaining 37 states do not tax Social Security benefits under any circumstances.
- Your state's tax rules are separate from federal tax rules — you may owe federal tax on benefits even if your state does not tax them.
How each of the 13 taxing states handles Social Security
Colorado taxes Social Security benefits like ordinary income, but only if your federal adjusted gross income (including half your benefits) exceeds $24,000 for single filers or $32,000 for married couples filing jointly. If you are over 55, you get an additional exemption that often shields your benefits entirely.
Connecticut taxes benefits only if your income exceeds $75,000 (single) or $100,000 (married). Kansas taxes benefits for people under 70 if income is above $75,000 (single) or $100,000 (married); people 70 and older pay no state tax on benefits. Minnesota taxes benefits using federal taxable income thresholds, but exempts people 65 and older from the first $14,410 of benefits.
Missouri exempts all benefits for people 59 and older. Montana taxes benefits like federal income tax does, but exempts people 65 and older. Nebraska taxes benefits for people under 65 if income exceeds $32,000 (single) or $50,000 (married); people 65 and older are exempt. New Mexico taxes benefits but exempts people 65 and older entirely.
Rhode Island taxes benefits for people under 65 if income exceeds $50,000 (single) or $75,000 (married); people 65 and older are exempt. Utah taxes benefits but allows a credit that often eliminates the tax. Vermont taxes benefits for people under 65 if income exceeds $32,000 (single) or $50,000 (married); people 65 and older are exempt. West Virginia taxes benefits for people under 65 if income exceeds $25,000 (single) or $32,000 (married); people 65 and older are exempt.
Why your state matters less than you might think
Even if you live in a state that taxes Social Security, the actual tax you owe is often zero or very small. Most of these states have age thresholds — typically 59, 62, or 65 — above which you owe nothing. If you are retired and over that age, check your state's specific rules before assuming you will owe tax.
Income thresholds also matter. Many states only tax benefits if your total income (including half your benefits) exceeds a certain amount. For people with modest retirement income, this threshold may be high enough that you never reach it. Your state's tax department website usually has a worksheet or calculator to help you figure out whether you actually owe tax.
Federal tax on Social Security is separate from state tax
The federal government taxes Social Security benefits for many people, regardless of which state you live in. You may owe federal tax on your benefits even if your state does not tax them. The federal rules use a formula based on your "combined income" — your adjusted gross income plus half your Social Security benefits plus any tax-exempt interest.
If your combined income is below $25,000 (single) or $32,000 (married filing jointly), you owe no federal tax on your benefits. Above those thresholds, up to 50 percent of your benefits may be taxable. If your combined income exceeds $34,000 (single) or $44,000 (married), up to 85 percent of your benefits may be taxable. This applies everywhere in the country.
How to find out what you owe in your state
Start with your state's tax department website. Search for "Social Security" and "taxation" or look for a page on retirement income. Most states have a fact sheet or worksheet that walks you through the calculation. If your state taxes benefits, the worksheet will show you whether your income puts you above or below the threshold.
If you cannot find the information online, call your state's tax department directly. Have your Social Security statement and last year's tax return handy. The staff can tell you in a few minutes whether you owe state tax on your benefits. You can also ask a tax preparer or accountant — they work with these rules every year and can give you a quick answer.
What to do if you live in a state that taxes benefits
If you owe state tax on your Social Security benefits, you have the same options as with any other income: you can pay it when you file your state return, or you can have it withheld from your benefit check. To set up withholding, contact Social Security and request a Form W-4V (Voluntary Withholding Request). You can choose to have 7, 10, 12, or 22 percent of your benefit withheld.
Many people choose withholding because it spreads the tax across the year rather than paying a lump sum at tax time. However, withholding is optional — you can also pay the tax directly when you file. If you expect to owe a large amount, ask a tax preparer whether withholding or quarterly estimated payments make more sense for your situation.
Moving to a different state and Social Security tax
If you are thinking about moving and want to reduce your tax burden, Social Security taxation is one factor to consider, but not the only one. States that do not tax Social Security often have other taxes — property tax, sales tax, or income tax on other types of retirement income — that may offset the benefit. Research your potential new state's overall tax picture, not just the Social Security rule.
If you already receive benefits and move to a different state, your federal tax situation does not change. Your state tax situation changes based on where you live on January 1 of the tax year. If you move mid-year, you may owe tax to both your old and new state for that year, so check with both tax departments about how to file.
Frequently Asked Questions
Does moving to a state that doesn't tax Social Security save me money?
Not necessarily. States without Social Security tax often have higher property tax, sales tax, or income tax on other retirement income. Compare the total tax picture — not just Social Security — before deciding to move. A tax professional can help you estimate your total state tax in each location.
If I live in a state that taxes Social Security, do I have to pay federal tax too?
Possibly. Federal tax and state tax are separate. You may owe federal tax on your benefits even if your state does not tax them, or you may owe state tax but not federal tax. Check both your state's rules and the federal rules using the combined income formula.
Can I reduce my Social Security tax by moving my income around?
Not easily. Both federal and state rules look at your total income for the year, including retirement account withdrawals, pensions, and investment income. Moving money between accounts does not change your total income. A tax professional can review your specific situation to see if any legitimate strategies explore to you.
What if I'm not sure whether I owe state tax on my benefits?
Use your state's tax worksheet or calculator, available on the state tax department website. If you still are not sure, call the state tax department or speak with a tax preparer. The cost of an hour with a tax professional is usually much less than the cost of filing incorrectly.
Do I need to report my Social Security benefits on my state tax return if my state doesn't tax them?
Rules vary by state. Some states that do not tax Social Security still require you to report it on your return for informational purposes. Check your state's tax form instructions or call the tax department to confirm what you need to report.