Thirteen states tax Social Security benefits; most do not

Thirteen states currently tax at least some Social Security income. They are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. The remaining 37 states do not tax Social Security benefits at all, regardless of your total income or filing status.

How much of your benefit gets taxed depends on your total income for the year — not just the Social Security itself. Each state that taxes Social Security uses its own rules about what counts as income and at what point taxation begins. Some states tax only a portion of your benefit; others tax it the same way they tax wages.

If you live in a state that does not tax Social Security, you owe nothing to that state on your benefits, even if you have other income. If you live in one of the 13 states that do tax it, you may owe state tax on part or all of your benefit depending on your specific situation.

Key Takeaways

  • Thirteen states tax Social Security: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, West Virginia, and Illinois.
  • Whether you owe tax in these states depends on your total income for the year, not just your Social Security amount.
  • Each state that taxes Social Security has different income thresholds and different rules about how much of your benefit is taxable.
  • If you live in a state that does not tax Social Security, you pay no state tax on your benefits no matter how much other income you have.

How each state calculates what you owe

The 13 states that tax Social Security do not all use the same method. Some follow the federal formula, which means they tax your benefit only if your "combined income" exceeds a certain threshold. Combined income includes your adjusted gross income, tax-exempt interest, and half of your Social Security benefit.

Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia each set their own income thresholds and tax rates. For example, one state might begin taxing your benefit once your combined income exceeds $25,000 (or $32,000 if you file jointly), while another might use a different threshold or tax a flat percentage of the benefit itself.

Illinois has a different approach: it excludes Social Security from income entirely for state tax purposes, meaning residents pay no state tax on Social Security benefits. This makes Illinois functionally similar to the 37 states with no Social Security tax, even though it technically has a state income tax.

Income thresholds vary by state and filing status

Each state that taxes Social Security sets a threshold — an income level below which you owe nothing. Once your combined income crosses that threshold, some or all of your benefit becomes taxable. The threshold often differs depending on whether you file as single or married filing jointly.

For example, a state might tax your benefit if your combined income exceeds $25,000 as a single filer but $32,000 as a married couple filing jointly. Some states have multiple thresholds: a lower one where taxation begins, and a higher one where the maximum portion of your benefit becomes taxable.

Because these thresholds and formulas change by state and sometimes by year, the only way to know what you owe is to check your specific state's tax rules or speak with a tax preparer familiar with your state's Social Security taxation rules.

How to find your state's specific rules

Your state's department of revenue or taxation website publishes the current rules for Social Security taxation. Search for "[your state] Social Security tax" or look for a page titled "Social Security Benefits" or "Retirement Income" on the department's site.

Many states provide worksheets or examples showing how to calculate whether your benefits are taxable. If you use tax software or work with a tax preparer, they can usually calculate this for you based on your state of residence and your income figures.

If you move to a different state during the year, you may owe tax to your old state for the months you lived there and to your new state for the months you lived there. Some states have reciprocal agreements that affect this; others do not. Your tax preparer can sort this out, or you can contact both states' revenue departments.

Federal tax on Social Security is separate from state tax

Whether or not your state taxes Social Security, you may still owe federal income tax on your benefits. The federal government taxes Social Security using the same combined-income formula mentioned above, with different thresholds: $25,000 for single filers and $32,000 for married couples filing jointly.

Federal taxation and state taxation are calculated separately. You could owe federal tax on your benefits but no state tax (if you live in a state that does not tax Social Security), or you could owe state tax but no federal tax (if your combined income is below the federal threshold but above your state's threshold).

Your Social Security statement and tax software will help you track both. If you are unsure whether you owe federal tax, the IRS website has worksheets and examples, or you can work with a tax preparer.

What happens if you do not pay state tax on Social Security

If you live in a state that taxes Social Security and you owe tax but do not pay it, the state can assess penalties and interest on the unpaid amount, just as it would for unpaid income tax on wages. The state may also offset your refund or take other collection action.

If you are unsure whether you owe tax, it is better to file a return or contact your state's revenue department than to skip filing. Many states offer payment plans or have rules about penalties if you file late but pay what you owe.

Frequently Asked Questions

If I move to a state that does not tax Social Security, do I get a refund for taxes I already paid?

No. Taxes you paid to your previous state are not refunded when you move. However, you may be able to claim a credit on your new state's return for taxes paid to another state, depending on your new state's rules. A tax preparer in your new state can advise you on this.

Does my spouse's Social Security get taxed separately from mine?

No. If you file jointly, your combined income includes both your benefits and your spouse's benefits. The tax is calculated on your household's total combined income, not on each person's benefit separately. If you file separately, each return is calculated individually.

Can I reduce my state tax by taking withdrawals from a retirement account instead of Social Security?

Not directly. Withdrawals from retirement accounts like IRAs or 401(k)s count as income and may actually increase your combined income, which could increase the amount of Social Security that becomes taxable. A tax preparer can model different withdrawal strategies for your situation.

What if I receive both Social Security and a government pension?

Government pensions count as income when calculating whether your Social Security is taxable. The higher your total income, the more of your benefit may be subject to state tax. Some states have special rules for government pensions; check your state's rules or work with a tax preparer.

Do I have to file a state return if I only have Social Security income?

It depends on your state and your income level. Some states that tax Social Security require you to file only if your combined income exceeds a certain threshold. Others require filing if you have any Social Security income. Check your state's filing requirements or contact the state revenue department.