Thirteen states tax Social Security benefits, but most do not
Thirty-seven states do not tax Social Security at all. Thirteen states tax some or all of your benefits under certain conditions. The states that tax Social Security are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Illinois taxes only a portion of benefits for higher-income retirees. Each state sets its own rules about income thresholds, tax rates, and which types of income count toward those thresholds.
Whether your benefits are taxed depends on your state of residence, your total income, and sometimes your filing status. A person with the same income and benefits might owe state tax in one state but not another. If you move to a different state after you start receiving benefits, your tax situation can change when ready.
Key Takeaways
- Thirteen states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, West Virginia, and Illinois (partial).
- Most states that tax Social Security only do so if your total income exceeds a threshold that varies by state and filing status.
- Your total income for these calculations usually includes wages, pensions, interest, dividends, and half of your Social Security benefits.
- If you move to a state that does not tax Social Security, you stop owing state tax on those benefits starting the next tax year.
- You report state Social Security tax on your state income tax return, not on your federal return.
How states calculate whether to tax your benefits
States that tax Social Security use an income threshold to decide. If your income stays below the threshold, you owe no state tax on your benefits. If you cross it, some or all of your benefits become taxable. The threshold varies by state and by whether you file as single, married filing jointly, or married filing separately.
The income used to calculate this threshold is not the same as your federal taxable income. States typically count your adjusted gross income plus half of your Social Security benefits. Some states also add back certain deductions. For example, if you have $30,000 in pension income and $20,000 in Social Security benefits, your income for state tax purposes might be calculated as $30,000 plus $10,000 (half your benefits), totaling $40,000. That $40,000 is what gets compared to your state's threshold.
Once you know your income exceeds the threshold, the amount of benefits that becomes taxable varies. Some states tax all benefits above the threshold. Others tax only a portion. A few states use the same federal formula, which can tax up to 85 percent of your benefits depending on how far your income exceeds the threshold.
State-by-state thresholds and tax treatment
| State | Single Threshold | Married Filing Jointly Threshold | Tax Treatment |
|---|---|---|---|
| Colorado | $20,000 | $32,000 | Up to 50% of benefits taxable |
| Connecticut | $15,000 | $20,000 | Up to 50% of benefits taxable |
| Kansas | No threshold | No threshold | Benefits fully taxable (with exemptions for some retirees) |
| Minnesota | $19,110 | $27,090 | Up to 50% of benefits taxable |
| Missouri | $25,000 | $32,000 | Up to 50% of benefits taxable |
| Montana | $12,000 | $15,000 | Up to 50% of benefits taxable |
| Nebraska | $19,200 | $28,800 | Up to 50% of benefits taxable |
| New Mexico | $10,000 | $20,000 | Up to 50% of benefits taxable |
| Rhode Island | $20,000 | $25,000 | Up to 50% of benefits taxable |
| Utah | $25,000 | $32,000 | Up to 50% of benefits taxable |
| Vermont | $20,000 | $25,000 | Up to 50% of benefits taxable |
| West Virginia | $25,000 | $32,000 | Up to 50% of benefits taxable |
| Illinois | $75,000 | $100,000 | Up to 50% of benefits taxable (only for higher incomes) |
These thresholds are set by each state and do not change with inflation in most cases. That means over time, more retirees in these states cross the threshold even if their income stays the same in real dollars. Some states adjust thresholds periodically, but you should check your state's current rules each year rather than relying on historical information.
Kansas is an outlier: it taxes Social Security benefits without a threshold, meaning benefits are taxable regardless of your income level. However, Kansas exempts some retirees from this tax depending on age and other factors, so you should verify whether the exemption applies to you.
How federal and state taxation differ
The federal government also taxes Social Security benefits, but the federal rules are different from state rules. On your federal return, you use Form 1040 and calculate how much of your benefits are taxable based on your combined income. The federal thresholds are $25,000 for single filers and $32,000 for married filing jointly. Up to 85 percent of your benefits can be taxable federally.
Your state tax calculation is separate. You report it on your state income tax return, not on your federal return. You might owe federal tax on your benefits, state tax, both, or neither, depending on your income and which state you live in. A person in a non-taxing state might owe federal tax but no state tax. A person in Colorado might owe both. The two systems do not coordinate.
If you live in a state that does not tax Social Security, you still file a federal return if your income requires it. You just do not file a state return that includes Social Security taxation, or if you file one, Social Security is not taxable on it.
What happens when you move to a different state
If you move from a state that taxes Social Security to one that does not, your state tax obligation changes on January 1 of the following year. You do not owe back taxes to the new state for benefits you received before you moved. However, you may still owe taxes to your old state for the part of the year you lived there.
Some retirees move specifically to avoid state Social Security taxation. This is legal. Your state of residence for tax purposes is generally where you live on December 31 of the tax year. If you move mid-year, you may owe taxes to both states for that year, but each state typically taxes only the portion of the year you lived there.
If you move from a non-taxing state to a taxing state, the reverse applies. You become subject to that state's Social Security tax starting January 1 of the next year. You should update your address with Social Security and your state tax authority to make sure you receive the correct forms and notices.
Reporting Social Security tax on your state return
Each state that taxes Social Security has its own form and instructions. You typically report the amount of benefits you received on your state income tax return, calculate how much is taxable using your state's rules, and include that amount in your taxable income. Many state forms walk you through this calculation step by step.
If you use tax software, most programs ask about your state of residence and Social Security income, then calculate your state tax automatically. If you prepare your return by hand, your state's tax instruction booklet includes a worksheet to determine how much of your benefits are taxable. The Social Security Administration sends you a Form SSA-1099 each January showing how much you received the previous year; you use this figure on your state return.
You file your state return by the same important date as your federal return, usually April 15. If you owe state tax on Social Security benefits, you can pay it with your return or set up a payment plan with your state tax authority if you cannot pay in full.
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 taxation are separate. Whether you owe federal tax depends on your income and the federal thresholds, not on your state's rules. Living in a state that does not tax Social Security does not change your federal tax obligation.
What if my income is right at the threshold for my state?
If your income equals the threshold exactly, you typically do not cross it, so no benefits are taxable. Once your income exceeds the threshold by even one dollar, some or all of your benefits become taxable depending on your state's rules. Check your state's specific calculation to be sure.
Can I reduce my state tax by claiming deductions?
Some deductions reduce your adjusted gross income, which lowers the income used to calculate whether you cross your state's threshold. Standard deductions and certain above-the-line deductions may help. However, the calculation varies by state. Review your state's instructions or speak with a tax preparer familiar with your state's rules.
If I move mid-year, do I owe taxes to both states?
Possibly. Most states tax only the income you earned while living there. If you lived in a taxing state for part of the year and a non-taxing state for the rest, you may owe tax to the first state for that portion. You should file returns in both states and report your move date to each tax authority.
Does the state tax on Social Security affect my Medicare premiums?
No. Medicare premiums are based on your modified adjusted gross income for federal purposes, not on state tax calculations. State Social Security taxation does not change your Medicare premium.