These are the states that do not tax Social Security benefits

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American workers contribute to Social Security funds through payroll taxes throughout their careers. Upon retirement, they will no longer have to pay in; instead, having met the requirements, they will begin to receive money from the Social Security Administration.

One would think that since they already paid taxes on their past income, they wouldn’t be on the hook for more taken out of their Social Security benefits. That view, though, is mistaken for around half of the beneficiaries must pay taxes to the federal government on social security benefits.

States, on the other hand, have their own tax laws, which vary widely across the nation. Nine states have no income tax, so they, along with 32 other states and the District of Columbia, do not tax Social Security benefits.

Nine states still apply at least some income taxes to Social Security benefits, but how they are taxed varies. The rates range from one to nearly nine percent.

How much does the IRS tax Social Security benefits?

At the federal level, Social Security benefits are taxed over and above a certain income level because the IRS assumes the retiree has another income source (i.e., that they are either working or have access to a private retirement account like a 401(k). However, if a retiree is receiving the average Social Security benefit of $1915 or less, and that is there only source of income, they will not be taxed.

According to the SSA, 50 percent of a taxpayer’s benefits may be subject to taxation if they meet the following criteria:

  • You file as a single taxpayer, head of household, or qualified widow/widow with income of $25,000 to $34,000.
  • You are separated from your spouse for the entire tax year and have income of $25,000 to $34,000.
  • You are married filing jointly with income of $32,000 to $44,000.

The tax rate on benefits increases to 85 percent if:

  • You file as a single taxpayer, head of household, or qualified widow/widow with income over $34,000.
  • You are married filing jointly with income over $44,000.
  • You are separated from your spouse for the entire tax year and have income greater than $34,000.
  • You are married filing separately and lived with your spouse at any time during the tax year.

The states that will not tax Social Security benefits in 2024

Social Security recipients are required to pay state taxes in addition to federal taxes unless they live in one of the 41 states or the District of Columbia that will no longer tax Social Security benefits. Missouri is the most recent state to drop income tax on Social Security benefits, with a bill signed into law in July 2023. Nebraska had been phasing out taxes on Social Security benefits in 2022, and they will be exempt in 2024, meaning that when filers submit their returns next year, the state will not take a dime from benefits.

  • Alabama
  • Alaska (no income tax)
  • Arizona
  • Arkansas
  • California
  • Colorado* (only those 65 and older)
  • Delaware
  • Florida (no income tax)
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Missouri (2024 first year benefits not taxed)
  • Nebraska (2024 first year benefits not taxed)
  • Nevada (no income tax)
  • New Hampshire (no income tax)
  • New Jersey
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • South Carolina
  • South Dakota (no income tax)
  • Tennessee (no income tax)
  • Texas (no income tax)
  • Virginia
  • West Virginia
  • Washington (no income tax)
  • Washington DC.
  • Wisconsin
  • Wyoming (no income tax)

States that tax Social Security benefits

In the nine states that do tax any of the beneficiaries’ Social Security payments in 2024, the rate applied varies:

  • Colorado (only those under 65): flat 4.4%
  • Connecticut: 3 to 6.99%
  • Kansas: 3.1 to 5.7%
  • Minnesota: 5.35 to 9.85%
  • Missouri: 0 to 5.4% (2023 last year benefits taxed for incomes over $85K, individuals & $100K joint filers)
  • Montana: 1 at 6.75%
  • Nebraska: 2.46 to 6.84% (2023 last year benefits will be taxed)
  • New Mexico: 1.7 to 5.9%
  • Rhode Island: 3.75 to 5.99%
  • Utah: 4.95%
  • Vermont: 3.35 to 8.75%

The rate applied to benefits depends on how much the total income is earned or received by a Social Security recipient. The higher the income, the higher the rate.