Thirteen states tax Social Security benefits, but only if your income crosses a threshold that varies by state

Thirteen states tax Social Security benefits as income: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. However, most people in these states pay nothing on their benefits because each state sets an income threshold — and most retirees fall below it.

The federal government taxes Social Security based on your combined income (wages, pensions, interest, and half your benefits). States that tax Social Security use similar logic but set their own thresholds and rates. A person with $30,000 in combined income might owe federal tax on benefits but nothing to their state, or vice versa.

The amount you owe depends on three things: which state you live in, your total income that year, and whether you file a state tax return at all. Some states exempt certain groups — like people over a certain age or those with military pensions — even though they tax Social Security for others.

Key Takeaways

  • Thirteen states tax Social Security benefits, but most residents in those states pay nothing because their income is below the state's threshold.
  • Each state sets its own income limit and tax rate, so the amount you owe in Colorado is calculated differently than in Connecticut.
  • Some states exempt people over a certain age or with military pensions from Social Security tax, even though they tax benefits for other residents.
  • You can find your state's threshold and rate on your state tax authority's website, usually under "Social Security" or "retirement income".

Colorado, Connecticut, and Kansas thresholds and rates

Colorado taxes Social Security for residents with federal adjusted gross income (FAGI) over $24,000 if single or $32,000 if married filing jointly. The tax rate is 4.63 percent, applied only to the portion of benefits above the threshold.

Connecticut taxes benefits for residents with combined income over $50,000 if single or $60,000 if married filing jointly. The rate varies: up to 1.5 percent on the first tier of income, then up to 5 percent on higher amounts. Connecticut also exempts residents age 60 and older from Social Security tax entirely.

Kansas taxes Social Security at its regular income tax rate (5.7 percent) but only for residents with federal taxable income above $75,000 if single or $137,500 if married filing jointly. Most Kansas residents never reach this threshold.

Minnesota, Missouri, Montana, and Nebraska thresholds and rates

Minnesota taxes benefits at its regular income tax rate (5.85 percent) for residents with federal taxable income over $68,025 if single or $108,650 if married filing jointly. Military pensions are exempt from this tax.

Missouri taxes Social Security at 5.3 percent for residents with federal adjusted gross income over $32,000 if single or $64,000 if married filing jointly. Residents age 59 and older are exempt.

Montana taxes benefits at its regular income tax rate (1 to 6.9 percent depending on income bracket) for residents with federal taxable income over $25,000 if single or $32,000 if married filing jointly.

Nebraska taxes Social Security at its regular income tax rate (2.84 to 6.84 percent) for residents with federal taxable income over $32,000 if single or $64,000 if married filing jointly. Residents age 67 and older are exempt.

New Mexico, Rhode Island, Utah, Vermont, and West Virginia thresholds and rates

New Mexico taxes benefits at its regular income tax rate (1.7 to 5.9 percent) for residents with federal taxable income over $100,000 if single or $150,000 if married filing jointly. Most New Mexico residents fall below this threshold.

Rhode Island taxes Social Security at 3.75 percent for residents with federal taxable income over $75,000 if single or $100,000 if married filing jointly.

Utah taxes Social Security at 4.65 percent for residents with federal taxable income over $25,000 if single or $32,000 if married filing jointly.

Vermont taxes benefits at its regular income tax rate (3.35 to 8.75 percent) for residents with federal taxable income over $32,000 if single or $64,000 if married filing jointly.

West Virginia taxes Social Security at 6.5 percent for residents with federal taxable income over $25,000 if single or $32,000 if married filing jointly. Residents age 59 and older are exempt.

What counts as income for state Social Security tax

Most states use federal adjusted gross income (FAGI) or federal taxable income as the starting point. This includes wages, self-employment income, pensions, interest, dividends, and capital gains. Half of your Social Security benefits are also counted as income for this calculation.

Some income is excluded from the calculation. Roth IRA withdrawals do not count. Municipal bond interest does not count in most states. Distributions from certain retirement accounts may be treated differently depending on the state.

The threshold is the income level at which the state begins to tax your benefits. If you are single in Colorado and earn $20,000 in pension income plus $8,000 in interest, your combined income is $28,000 — above the $24,000 threshold — so some of your Social Security benefits would be taxed. If you earned only $22,000 total, you would owe nothing.

How to find your state's current threshold and rate

Your state's tax authority website has a page for Social Security taxation, usually under "retirement income" or "Social Security". The Department of Revenue (or equivalent agency) in your state publishes the current thresholds and rates each year.

You can also contact your state tax authority directly by phone or email. Have your filing status (single, married filing jointly, etc.) and your estimated income ready. They can tell you whether you will owe tax that year.

Your tax preparer or accountant can calculate your state Social Security tax as part of your annual return. If you prepare your own taxes, most tax software will calculate it automatically once you enter your income and state.

Frequently Asked Questions

If I move to a state that does not tax Social Security, do I get a refund on what I paid before?

No. State tax is based on where you lived when you earned the income. If you lived in Connecticut in 2023 and paid tax on your benefits, moving to Wyoming in 2024 does not refund the 2023 tax. Your 2024 benefits will not be taxed by Wyoming.

Does federal Social Security tax count toward the state threshold?

No. The federal tax on Social Security and the state tax on Social Security are separate calculations. Your federal combined income threshold is different from your state threshold. You can owe federal tax but no state tax, or state tax but no federal tax.

If I have a pension and Social Security, am I more likely to owe state tax?

Yes. Both the pension and half your Social Security count toward the income threshold. A person with a $40,000 pension and $20,000 in Social Security benefits has $50,000 in combined income (the pension plus half the benefits). This combined total determines whether you cross the state threshold.

Can I reduce my state Social Security tax by taking less from my retirement accounts?

Possibly. Since combined income determines the threshold, withdrawing less from pensions or IRAs could lower your total income and keep you below the state's limit. However, this strategy depends on your state's rules and your overall financial situation. A tax preparer can model different withdrawal amounts to see the effect.

Do I have to file a state tax return if my income is below the threshold?

That depends on your state. Some states require you to file if you have any state income tax liability, while others do not require a return if you are below a certain income level. Check your state tax authority's filing requirements for your age and income level.