Nine states currently tax Social Security benefits, and the rules vary widely by state and income level
If you receive Social Security and live in Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, Rhode Island, or Utah, your state may tax part or all of your benefits. The amount you owe depends on your total income, your filing status, and how your state's tax code is written. Unlike federal income tax, which does not tax Social Security for most people, these nine states treat benefits as taxable income under their own tax systems.
The tax you pay is not automatic. You report it when you file your state income tax return, just like you would report wages or other income. The amount varies significantly: some states tax benefits only if your income exceeds a certain threshold, while others tax benefits at their standard income tax rate regardless of how much you earn. Understanding your state's specific rules now can help you plan for what you owe at tax time.
Key Takeaways
- Nine states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, Rhode Island, and Utah.
- Each state has different income thresholds and tax rates, so the amount you owe depends on where you live and how much total income you have.
- You report Social Security tax on your state income tax return; it is not withheld automatically from your benefit payments.
- Some states offer exemptions or deductions for people over a certain age or with income below a threshold.
How each of the nine states taxes Social Security
Colorado taxes Social Security benefits as ordinary income with no special exemption. If you file as single and have any Colorado taxable income, your benefits are included in that total and taxed at Colorado's standard rates, which range from 4.4% to 8.75% depending on your income bracket.
Connecticut taxes benefits only if your federal adjusted gross income plus half your Social Security benefits exceeds $75,000 (single filers) or $100,000 (married filing jointly). When you exceed that threshold, up to 50% of your benefits become taxable. Connecticut's income tax rate is 4.5% to 6.99%.
Kansas taxes all Social Security benefits as income, but offers a full exemption if you are 55 or older. People under 55 pay Kansas income tax on their benefits at rates from 5.7% to 10.9%.
Minnesota taxes benefits using a federal formula: if your combined income (adjusted gross income plus nontaxable interest plus half your benefits) exceeds $32,640 (single) or $40,800 (married filing jointly), up to 85% of your benefits may be taxable. Minnesota's income tax ranges from 5.35% to 9.85%.
Missouri taxes Social Security benefits as income, but exempts people age 59 and older. Those under 59 pay Missouri's income tax, which ranges from 1.5% to 5.9%.
Montana taxes benefits as income with no age exemption. However, Montana allows a deduction of up to $3,640 per person (adjusted annually for inflation) if you are 65 or older. Montana's income tax rate is a flat 6.9%.
Nebraska taxes all Social Security benefits as income, but offers a full exemption for people age 67 and older. Those under 67 pay Nebraska's income tax, which ranges from 2.84% to 6.84%.
Rhode Island taxes benefits only if your federal adjusted gross income plus half your Social Security benefits exceeds $50,000 (single) or $100,000 (married filing jointly). When you exceed that threshold, up to 85% of your benefits become taxable. Rhode Island's income tax ranges from 3.75% to 5.99%.
Utah taxes all Social Security benefits as income. However, Utah offers a full exemption if you are 59 or older. Those under 59 pay Utah's income tax, which ranges from 4.95% to 8.95%.
Income thresholds that determine whether you owe tax
Several of the nine states use income thresholds to decide whether Social Security is taxable. These thresholds are based on "combined income," which is calculated differently in each state but typically includes your adjusted gross income, certain nontaxable interest, and a portion of your Social Security benefits.
Connecticut, Minnesota, and Rhode Island all use a threshold formula similar to the federal formula. If your combined income stays below the threshold, none of your benefits are taxed. Once you cross it, a percentage of your benefits (usually up to 50% or 85%) becomes subject to tax. These thresholds are not adjusted for inflation in most cases, so more people may owe tax over time as their income grows.
Colorado, Kansas, Missouri, Montana, Nebraska, and Utah do not use income thresholds. Instead, they tax Social Security benefits as ordinary income once you have any taxable income in the state. The main way to avoid or reduce the tax in these states is to meet an age exemption (if one exists) or to keep your total income low enough that you do not owe state income tax at all.
Age exemptions that can reduce or eliminate your tax bill
Five of the nine states offer age-based exemptions that either reduce or eliminate Social Security tax for older residents. Kansas, Missouri, Nebraska, and Utah all provide a full exemption once you reach a certain age: 55 in Kansas, 59 in Missouri and Utah, and 67 in Nebraska. Montana does not offer a full exemption but allows a deduction of up to $3,640 per person if you are 65 or older, which reduces the amount of benefits subject to tax.
Colorado, Connecticut, Minnesota, and Rhode Island do not offer age-based exemptions. In these states, your age does not change whether Social Security is taxable; only your income level and filing status matter.
If you live in a state with an age exemption, check the exact age requirement before you file. Some states use age 55, others use 59, and still others use 65 or 67. Reaching the exemption age can significantly lower your state tax bill.
How to report Social Security tax on your state return
You report Social Security tax when you file your state income tax return, typically using the same form you would use to report other income. Your Social Security benefits appear on Form SSA-1099, which you receive by January 31 each year. You use this form to calculate how much of your benefits are taxable under your state's rules.
If you use tax preparation software or hire a tax preparer, they will ask you for your Social Security income and apply your state's tax rules automatically. If you prepare your return by hand, you will need to follow your state's instructions for calculating taxable benefits. Most state tax forms include a worksheet or instructions that walk you through the calculation step by step.
You do not need to do anything special during the year. Social Security payments are not withheld for state income tax purposes. If you expect to owe state tax on your benefits, you can request voluntary withholding from your Social Security check, though this is uncommon. Most people simply pay the tax when they file their return.
Planning ahead if you live in a taxing state
If you live in one of these nine states and are still working or have other sources of income, consider how additional income might push you over a tax threshold or increase your tax bill. A part-time job, pension, or investment income can all count toward your combined income and trigger taxation of benefits you thought were safe.
If you are approaching retirement and live in a state that taxes benefits, you might explore whether moving to a non-taxing state makes financial sense. Seven states (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming) have no income tax at all, so they do not tax Social Security. Other states tax income but exempt Social Security entirely. If you have flexibility in where you live, the tax difference over many years of retirement can be substantial.
You can also work with a tax professional to understand your specific situation. The calculation of taxable benefits is complex, and small changes in income can sometimes have outsized effects on your tax bill. A professional can show you whether adjusting the timing of income, taking deductions you may have missed, or making other changes could reduce what you owe.
Frequently Asked Questions
Do I have to pay federal tax on Social Security if I live in one of these nine states?
Federal and state taxes are separate. Most people do not owe federal tax on Social Security, regardless of which state they live in. You may owe state tax in one of the nine states listed here, but that does not change your federal tax situation. Check the federal rules separately to see if any of your benefits are taxable at the federal level.
What if I moved to one of these states after I retired?
Your state of residence for tax purposes is where you live on December 31 of the tax year. If you moved to a taxing state during the year, you may owe tax on your benefits for that year. Some states allow part-year resident returns, which may reduce your tax. Contact your state tax agency to report your move and understand how it affects your return.
Can I reduce my taxable benefits by taking deductions?
Deductions reduce your overall taxable income, which can lower the amount of Social Security that becomes taxable. For example, if you have charitable donations or medical expenses, deducting them lowers your combined income and may keep you below a state threshold. Work with a tax professional to make sure you are claiming all deductions you are may have access to to.
What if my income varies from year to year?
Your Social Security tax bill will change based on your income each year. A year with high income from a job or investment gains may push you over a threshold and trigger tax on benefits. A year with lower income may drop you below the threshold. File your return based on your actual income for each tax year, and expect your bill to fluctuate.
Are there any credits or offsets that reduce Social Security tax?
Credits and offsets vary by state. Some states offer credits for low-income retirees or for taxes paid to other states. Check your state tax agency's website or speak with a tax professional to see whether you may have access to for any credits that could reduce your bill.