Thirteen states tax Social Security benefits, but most do not

Only 13 states currently tax Social Security income: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. If you live in any other state, your Social Security benefits are not subject to state income tax, regardless of your total income or filing status.

The way these 13 states tax Social Security varies significantly. Some tax it the same way the federal government does — based on your combined income (adjusted gross income plus nontaxable interest plus half your Social Security benefits). Others use different thresholds or exclude certain groups of retirees entirely. A few have phased out their taxes or changed the rules in recent years, so the rules that applied last year may not apply this year.

If you moved to a new state after you started receiving Social Security, your tax obligation changed on the day you became a resident of that state. If you are considering a move, the state tax treatment of Social Security can be a real factor in your retirement budget.

Key Takeaways

  • Thirteen states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.
  • Each state that taxes Social Security uses different income thresholds and rules, so the amount you owe depends on which state you live in and your total income.
  • Some states exempt retirees over a certain age or those with income below a threshold, so you may not owe state tax on Social Security even if you live in a taxing state.
  • Your state tax obligation on Social Security is separate from your federal tax obligation and is based on your state residency, not where you worked or where you receive your benefits.

How the 13 taxing states calculate what you owe

The states that tax Social Security do not all use the same formula. Most follow the federal method: they add your adjusted gross income, nontaxable interest, and half your Social Security benefits to get a "combined income" figure. If that combined income exceeds a threshold, a portion of your benefits becomes taxable.

Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia each set their own thresholds and percentages. For example, one state might tax up to 50 percent of your benefits if your combined income exceeds $25,000 (or $32,000 if you file jointly), while another might use a different threshold or allow a higher percentage to be taxed. Some states also cap the amount of benefits that can be taxed in a single year.

Because the rules differ so much, you cannot assume that your federal tax bill tells you what you will owe in state tax. You need to check your specific state's rules or work with a tax preparer who knows your state's Social Security tax law.

States with age-based or income-based exemptions

Several of the 13 taxing states have carved out exemptions for certain groups. Some exempt retirees who are 62 or older, or who are 65 or older. Others exempt people whose total income falls below a certain level. A few have exemptions for military pensions or other types of retirement income that may also apply to your situation.

Missouri, for instance, exempts Social Security benefits entirely for residents age 59 and older. Nebraska exempts benefits for residents age 67 and older. These age-based exemptions mean that even though your state technically taxes Social Security, you may not owe anything if you meet the age requirement.

Income-based exemptions work differently: if your combined income is below the state's threshold, none of your Social Security is taxable. If you are above the threshold, the calculation proceeds as normal. Check your state's Department of Revenue website or your state tax form instructions to see whether you fall into an exempt category.

Recent changes and states that have phased out the tax

Several states have reduced or eliminated their Social Security taxes in recent years. New Mexico has been phasing out its tax gradually, and other states have made changes to their thresholds or exemptions. Because these rules change, the status of Social Security taxation in your state may be different from what you remember or what you read online a few years ago.

If you are planning your taxes or considering a move, check your state's current tax code or contact your state Department of Revenue directly. Tax forms and instructions published each year will reflect the current rules, and that is the most reliable source for what you actually owe.

How to report Social Security on your state tax return

If you live in a state that taxes Social Security and you owe tax on your benefits, you will report it on your state income tax return. Most states have a line or schedule specifically for Social Security income. You will need the same information you use for your federal return: your Social Security Statement (Form SSA-1099), which shows how much you received in the tax year.

Your federal tax return does not automatically flow to your state return, so you cannot assume that because you reported Social Security income to the IRS, your state already knows about it. You must file a state return if your state requires it and if your income exceeds the filing threshold for your state.

If you did not receive a Form SSA-1099 but you received benefits, contact the Social Security Administration to request one. You will need it to file accurately in any state.

What happens if you move between states

Your state tax obligation on Social Security is based on where you live on the last day of the tax year, not where you lived when you received the benefits or where you worked. If you moved from a non-taxing state to a taxing state partway through the year, you may owe tax on your Social Security for that year, even though you were not a resident for the entire year.

Some states have reciprocal agreements or special rules for people who move during the year, but these are rare and vary widely. If you moved or are planning to move, contact the tax authority in your new state to find out how they handle mid-year moves and whether you need to file a part-year return.

Frequently Asked Questions

Do I have to pay federal tax on Social Security if I live in a state that does not tax it?

Yes, federal and state taxes are separate. Even if your state does not tax Social Security, you may still owe federal income tax on your benefits. The federal threshold is higher than most state thresholds, so you might owe federal tax but not state tax, or vice versa. Check both your federal and state tax rules.

If I receive Social Security and a pension, does the pension count toward the income threshold?

Yes. Most states that tax Social Security use "combined income," which includes your adjusted gross income (including pensions, wages, and other retirement income), nontaxable interest, and half your Social Security benefits. A large pension can push you over the threshold and make your Social Security taxable even if the benefits alone would not.

What if I worked in one state but moved to another after I retired?

Your state tax obligation is based on where you live now, not where you worked. If you moved to a state that taxes Social Security, you will owe tax on your benefits starting in the year you became a resident, even if you worked in a different state for your entire career.

Can I deduct my state Social Security tax from my federal taxes?

No. State income taxes can be deducted on your federal return (up to $10,000 per year under current law), but only if you itemize deductions. The Social Security portion of your state tax is included in that total, not deducted separately. Most people take the standard deduction instead, so they do not deduct state taxes at all.

Where can I find my state's exact Social Security tax rules?

Your state Department of Revenue website publishes tax forms and instructions each year that explain the current rules. You can also call your state's tax helpline or consult a tax preparer licensed in your state. The IRS website has links to each state's tax authority if you need to find the right office.