13 states that tax social safety advantages

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How Does Your State Treat Social Security Income Does Your State Tax Social Security Benefits Compare States that tax Social Security benefits

Thirteen states tax social security benefits, which is of great interest to retirees. Each of these states has its own approach to determining what proportion of benefits is taxable, although these provisions can be broken down into some broad categories. Today’s map illustrates these approaches.

Thirty-seven states and DC either have no income tax (AK, FL, NV, SD, TN, TX, WA, WY) or do not include social security benefits in their taxable income calculation (AL, AZ, AR, CA, DE, DC, GA , HI, ID, IL, IN, IA, KY, LA, ME, MD, MA, MI, MS, NH, NJ, NY, NC, OH, OK, OR, PA, SC, VA, WI).

New Mexico includes all social security benefits in its taxable income base, although the state provides a deduction that reduces the tax liability of all retirement income.

Utah taxes Social Security benefits but uses tax credits to remove liability for beneficiaries less than $ 30,000 (single applicants) or $ 50,000 (joint applicants), with credits tapering off at 2.5 cents for every dollar above these thresholds. Up until this year, Utah’s credits reflected federal tax law, where the taxable portion of Social Security income was determined by two factors: a taxpayer’s filing status and the amount of their “combined income” (adjusted gross income + non-taxable interest + half social security benefits) . Under federal law – and Utah law before HB 86 went into effect – the thresholds were $ 25,000 and $ 32,000, respectively.

In addition, several countries are lowering the taxation of social security benefits depending on factors such as age or income level:

In Colorado, taxpayers can deduct part of their social security (as well as retirement) income as long as they are 55 years of age or older.

Connecticut excludes social security benefits from income calculations for taxpayers with an Adjusted Gross Income (AGI) less than $ 75,000 (single applicant) or $ 100,000 (joint application).

Kansas provides an exemption for such benefits for any taxpayer whose AGI is $ 75,000, regardless of filing status.

Minnesota has a tiered system of social security deductions that take effect when an individual’s provisional income is less than $ 81,180 (single filing) or $ 103,930 (joint filing).

Missouri allows 100 percent social security exemption as long as the taxpayer is 62 years of age or older and has an annual income of less than $ 85,000 (single filing) or $ 100,000 (joint filing).

In Nebraska, single applicants with an AGI of $ 43,000 or less ($ 58,000 for registering a marriage together) can deduct their Social Security income. If their income is above this threshold, the state follows federal treatment.

In North Dakota, taxpayers can deduct taxable Social Security benefits if their AGI is less than $ 50,000 (single filing) or $ 100,000 (joint filing).

Rhode Island allows a change for taxpayers who have reached the full retirement age set by the Social Security Agency and who have a federal AGI of less than $ 81,900 (single filing) or $ 102,400 (joint filing).

Vermont has a tiered system of Social Security exemptions that are introduced when a taxpayer’s income is less than $ 34,000 (single filing) or $ 44,000 (joint filing).

While Montana and West Virginia have no age or income regulations, their approaches to such taxes still deserve attention.

In Montana, which has no age or income requirements, some social security benefits may be taxable, and the state advises taxpayers to fill out a worksheet to see how the state’s taxable amount differs from the federal taxable amount.

West Virginia passed law in 2019 to phase out social security taxes for those earning no more than $ 50,000 (single filer) or $ 100,000 (spouse joint filing). From the 2020 tax year, the state has released 35 percent of the benefits for eligible taxpayers. From 2021 this amount rose to 65 percent, and in 2022 the benefits for these taxpayers will be completely exempt.