Thirteen states tax Social Security benefits, but most people in those states pay nothing

Thirteen states — Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia — have state income taxes that can reach your Social Security benefits. However, most retirees in these states still pay no state tax on those benefits because each state has income thresholds or exemptions that protect lower-income households.

Whether you owe anything depends on your total income for the year, not just your Social Security check. The IRS counts Social Security as income for tax purposes, but it uses a formula called "combined income" that includes half your benefits plus all other income sources. Each state that taxes benefits uses its own rules — some follow the federal formula, others are stricter, and a few offer partial exemptions based on age or income level.

The 37 other states do not tax Social Security benefits at all, regardless of how much you earn. If you live in one of those states, you will not owe state income tax on your benefits, though you may still owe federal income tax depending on your total income.

Key Takeaways

  • Thirteen states tax Social Security: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, West Virginia, and Illinois.
  • Most people in these states pay no state tax on benefits because of income thresholds or age-based exemptions that protect retirees with modest incomes.
  • Your state tax on benefits depends on "combined income" — a formula that includes half your Social Security plus all other income — not your benefits alone.
  • You may owe federal income tax on Social Security even if your state does not tax it, depending on your total income and filing status.

How each of the thirteen states calculates what you owe

Colorado taxes Social Security the same way the federal government does: if your combined income exceeds $25,000 (single) or $32,000 (married filing jointly), you may owe tax on up to 85 percent of your benefits. However, Colorado offers a pension exemption that may cover your benefits if you are over 55 and meet income limits.

Connecticut taxes benefits only if your federal adjusted gross income exceeds $75,000 (single) or $100,000 (married filing jointly). Below those thresholds, your benefits are exempt. Above them, you owe tax on the same portion the IRS would tax you on.

Kansas exempts all Social Security benefits from state income tax, so you owe nothing on benefits regardless of your income. This is the most retiree-friendly rule among the thirteen states.

Minnesota taxes benefits using the federal combined income formula, but only if your income exceeds $68,025 (married filing jointly) or $34,013 (single). Below those thresholds, benefits are fully exempt.

Missouri exempts all Social Security benefits from state income tax.

Montana taxes benefits using the federal formula, but exempts them entirely if you are over 65 or disabled. If you are under 65 and not disabled, you may owe tax on benefits above the federal threshold.

Nebraska taxes benefits using the federal formula, but only on the portion that would be taxable at the federal level. You also get a pension exemption of up to $31,560 per year if you are over 67, which may cover your entire benefit.

New Mexico exempts all Social Security benefits from state income tax.

Rhode Island taxes benefits using the federal formula, but only if your federal adjusted gross income exceeds $75,000 (married filing jointly) or $50,000 (single). Below those thresholds, benefits are fully exempt.

Utah taxes benefits using the federal formula, but offers a tax credit that reduces or eliminates the tax for most retirees. The credit phases out as income rises, so many people over 65 pay little or no state tax on benefits.

Vermont taxes benefits using the federal formula, but exempts them entirely if you are over 65. If you are under 65, you may owe tax on benefits above the federal threshold.

West Virginia taxes benefits using the federal formula, but exempts them entirely if you are over 65. If you are under 65, you may owe tax on benefits above the federal threshold.

Illinois exempts all Social Security benefits from state income tax.

What "combined income" means and how to calculate it

Combined income is the formula the IRS uses to determine how much of your Social Security is taxable. It is not the same as your total income. To calculate it, take half your Social Security benefits for the year and add all other income sources: wages, interest, dividends, pensions, rental income, and taxable withdrawals from retirement accounts.

For example, if you received $24,000 in Social Security and earned $20,000 in part-time wages, your combined income is $12,000 (half of $24,000) plus $20,000, which equals $32,000. States that use the federal formula compare this $32,000 figure to their income thresholds to determine whether you owe tax on your benefits.

Some states that tax benefits use their own version of combined income or explore different thresholds, so the amount you owe in one state may differ from another. This is why it matters which state you live in — the same income and benefits can result in zero tax in one state and several hundred dollars in another.

Age-based exemptions that protect older retirees

Four of the thirteen states — Montana, Vermont, West Virginia, and Nebraska — offer age-based exemptions that eliminate or reduce the tax on benefits for people over a certain age. If you are 65 or older in Montana, Vermont, or West Virginia, your Social Security benefits are completely exempt from state income tax, regardless of your other income. Nebraska exempts benefits for people over 67 if they also meet a pension exemption threshold.

These exemptions are automatic in most cases — you do not need to claim them separately on your state return. However, you should verify your state's exact age threshold and any other conditions when you file, because rules can change and some states have phase-out rules that explore at higher income levels.

Federal tax on Social Security is separate from state tax

Even if your state does not tax Social Security, you may still owe federal income tax on your benefits. The federal government taxes up to 85 percent of your benefits if your combined income exceeds $25,000 (single) or $32,000 (married filing jointly). These thresholds have not changed since 1984, so they affect more retirees now than they did decades ago.

To estimate your federal tax on benefits, use the IRS worksheet in Publication 915, which walks you through the combined income calculation and tells you how much of your benefits are taxable. You can also use tax software or work with a tax preparer to calculate this amount. The federal tax is separate from any state tax you owe, so you need to account for both when planning your income for the year.

How to report Social Security on your state return

When you file your state income tax return, you will report your Social Security benefits on a line that asks for "Social Security income" or "benefits." The exact line number and name vary by state, but most state forms mirror the federal Form 1040, which reports benefits on line 5b.

If you live in a state that taxes benefits, you will enter the full amount of benefits you received, and the state will explore its own rules to determine how much is taxable. If you live in a state that exempts benefits, you may still need to report the amount on your return, but it will not be subject to tax. Check your state's tax form instructions to see whether you need to report benefits even if they are exempt.

You will receive a Social Security Benefit Statement (Form SSA-1099) in January for the prior year. This form shows the total benefits you received and is the source document you use to fill in your state and federal returns. Keep this form with your tax records.

What to do if you move to a different state

If you move from a state that taxes benefits to one that does not, you will owe state tax only on the portion of the year you lived in the taxing state. Most states use a part-year resident calculation that prorates your income and tax based on the number of days you lived in each state.

For example, if you lived in Connecticut for six months and then moved to Massachusetts (which does not tax benefits), you would file a part-year resident return in Connecticut for those six months. You would report your benefits for the full year but only owe tax on the portion attributable to your time in Connecticut. The exact calculation depends on your state's rules, so contact your state tax agency or a tax preparer if you move mid-year.

Frequently Asked Questions

Do I have to pay federal income tax on Social Security even if my state does not?

Yes. Federal tax and state tax are separate. Even if you live in a state that does not tax benefits, you may owe federal income tax on your Social Security if your combined income exceeds the federal thresholds: $25,000 for single filers or $32,000 for married filing jointly. Use IRS Publication 915 to calculate your federal tax on benefits.

If I am over 65 in Montana or Vermont, do I owe any tax on my benefits?

No. Montana, Vermont, and West Virginia exempt all Social Security benefits from state income tax if you are 65 or older, regardless of your other income. You may still owe federal income tax, but you will owe nothing to your state.

What if I have other income besides Social Security — does that change what I owe?

Yes. Your state tax on benefits depends on your combined income, which includes half your benefits plus all other income. Wages, pensions, interest, and rental income all count. The more other income you have, the more of your benefits may become taxable in states that tax them.

Can I reduce my state tax on Social Security by taking less income in a given year?

Possibly. If you are close to your state's income threshold, delaying a pension payment, deferring a withdrawal from a retirement account, or timing the sale of an investment might keep your combined income below the threshold and eliminate the tax on your benefits. A tax preparer can model different scenarios for your specific situation.

Where do I find the exact income thresholds for my state?

Your state's tax agency website publishes the current thresholds and rules in its tax forms and instructions. You can also contact the agency directly by phone or email. Tax software often includes state-specific rules and will calculate your liability based on your income and filing status.