These States Tax Social Security: How Much Will You Pay If You Live There?

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For many Americans, Social Security benefits are not taxable. However, if you earn above certain threshold amounts – at least $25,000 for individuals and $34,000 for joint filers – at least a portion of your benefits will be federally taxable.

Depending on where you live, you may also face state taxes on your Social Security benefits. For the tax year 2022, 11 states taxed Social Security benefits in at least some situations: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont. The average Social Security benefit for 2022 is $1,784.21. Although some state tax rates vary depending on income, here’s an overview of how much you might pay if you live in one of the states that tax benefits.

Colorado

For the 2022 tax year, you’ll face a 4.4% tax rate in Colorado. This would mean a monthly state tax liability of $78.51 on the average Social Security benefit. Bear in mind, however, that Colorado allows taxpayers 65 and older a deduction of either $24,000 or their taxable pension/annuity income, whichever is smaller, from their federal taxable income. This can eliminate the entire state taxable amount for some taxpayers.

Connecticut

Filing status and income level play a big role in state taxation in Connecticut, where rates can range from 3% to 6.99%. In some cases, some or all of your Social Security income can be state tax-free. For those who have to pay, monthly taxes on the average benefit will reach between $53.53 and $124.72.

Kansas

If your federal adjusted gross income is $75,000 or less, regardless of filing status, you won’t have to worry about paying state taxes on your Social Security benefits in Kansas. Otherwise, you’ll face a tax of between 3.1% and 5.7%, or $55.31 to $101.70 monthly.

Minnesota

Legislators are working on eliminating Social Security taxation altogether, but for now, benefits can be taxed at rates as high as 5.35% to 9.85%. However, if Minnesota taxpayers meet certain income thresholds, they may be able to subtract some of the Social Security from their adjusted income. Those paying the full rate may owe between $95.46 and $175.74 per month on the average Social Security benefit.

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Missouri

Missouri taxpayers 62 and older with AGIs under certain limits can completely exempt their Social Security income from state taxation. Otherwise, it may be taxable at a rate between 1.5% and 5.4%. This could result in monthly taxes of $26.76 to $96.35. In Minnesota, however, state legislators are currently considering a bill to exempt all Social Security income by 2024 completely. 

Montana

Montana allows state residents to deduct a portion of their Social Security income, depending on their income level. For those with incomes above the limits, taxes from 1% to 6.75% may apply. This could reduce your monthly Social Security check by $17.84 to $120.43. 

Nebraska

Nebraska taxpayers will enjoy the complete elimination of taxes on Social Security income by 2025. From 2022 through 2024, a phaseout has been initiated. In 2022, for example, taxpayers could deduct 40% of Social Security benefits from their adjusted gross income. For the remaining taxable balance, 2.46% to 6.84% apply. After the reduction of 40% from the average Social Security payout, Nebraska taxpayers would pay between $26.33 and $73.22. 

New Mexico

Recent changes in New Mexico law mean that most seniors are now exempt from state Social Security taxes. Specifically, single taxpayers with AGIs below $100,000 and joint filers with incomes below $150,000 qualify for the exemption. Surviving spouses and heads of households have the same $150,000 threshold income limit, while a $75,000 limitation applies to those who are married filing separately. For those who don’t fall under these income limits, taxes of 1.7% to 5.9% still apply. This could result in average reductions in monthly benefits of $30.31 to $105.27. 

Rhode Island

As with New Mexico, residents of Rhode Island can completely exempt their Social Security income from taxation if their income falls below certain limits. For 2022, the limits are $119,750 for joint filers and $95,800 for those with statuses of single, or married filing separately or head of household. Otherwise, taxes in the range of 3.75% to 5.99% apply, resulting in a tax bite of between $66.91 and $106.87 monthly on the average Social Security benefit.

Utah

Utah’s flat tax rate of 4.85% would reduce average Social Security benefits by $86.53 per month. But taxpayers qualify for a tax credit to offset Social Security payments if their income is under certain limits. The AGI limits are $37,000 for single filers, $62,000 for joint filers, and $31,000 for those who are married and filing separately. 

Vermont

Taxpayers in Vermont can fully exempt their Social Security income from taxation with AGIs under certain limits. Those who are married and filing jointly – including those in civil unions – have a limit of $60,000, while all others have a threshold of $45,000. Income in excess of these limits triggers a phaseout. Those who have to pay tax will face rates of 3.35% to 8.75%. This could translate to monthly state taxes of $59.77 to $156.12 on the average Social Security benefit. 

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