Which states tax social security benefits in 2023

Which states tax social security benefits is a very common question, especially when inflation has gone up considerably and everyone wants to save money from the tax burden. At present, twelve states in the USA tax social security benefits.

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List of States that tax social security benefits in 2023

1. Colorado

Colorado taxes Social Security benefits based on the taxpayer’s income level. If your combined income, including Social Security benefits, is above $75,000 (for individuals) or $100,000 (for couples), then your Social Security benefits will be taxed.

Those taxpayers who are 65 or more are not taxed. People aged 55 to 64 get deductions up to $20,000 in retirement income, including Social Security income. Balance is taxable for them.

2. Connecticut

Connecticut taxes Social Security benefits based on the taxpayer’s income level. If your adjusted gross income exceeds $75,000 (for individuals) or $100,000 (for couples), your Social Security benefits will be taxed.

The social security income is exempt up to AGI of less than $75,000 for single taxpayers and up to AGI of $100,000 for married couples.If income exceeds the threshold, 75 percent of your Social Security benefits are tax-exempt. 

3. Kansas

Kansas taxes Social Security benefits based on the taxpayer’s income level. If your adjusted gross income exceeds $75,000 (for individuals) or $100,000 (for couples), then your Social Security benefits will be taxed.

4. Minnesota

Minnesota follows the same taxation guidelines as the federal government. If the total income (including Social Security benefits) is below $25,000 (for individuals) or $32,000 (for couples), your Social Security benefits will not be taxed. However, your Social Security benefits will be taxed if your income exceeds these thresholds.

Single filers can deduct up to $4,260 (couples can subtract $5450) of their federally taxable benefits from their Minnesota state income. 

However, the subtraction is phased out for those with higher incomes, starting at $82,770 for married joint filers and $64,670 for singles.

5. Missouri

Missouri taxes Social Security benefits based on the taxpayer’s income level. If your adjusted gross income exceeds $85,000 (for individuals) or $100,000 (for couples), then your Social Security benefits will be taxed.

6. Montana

Montana taxes Social Security benefits based on the taxpayer’s income level. If your adjusted gross income exceeds $25,000 (for individuals) or $32,000 (for couples), then your Social Security benefits will be taxed.

7. Nebraska

Social Security benefits are exempt for Married filing jointly with an AGI upto $61,760 and for singles with an AGI below $45,790.

8. New Mexico

The social security benefits is totally exempt, in the state of New Mexico , for taxpayers having income below $100,000 for an individual and $150,000 for married filing jointly.

9. Rhode Island

The social security benefit is tax-free for single taxpayers or heads of households between 66 and 67 years, with AGI below $95,800. For married filing jointly threshold is $119,750 for a couple.

10. Utah

Utah taxes Couples and heads of households reporting income over $62,000 or more and singles making $37,000 or more.

11. Vermont

Vermont taxes single filers earning $60,000 or more and couples making $75,000 or more. 

For those who are single and earn AGI of $50,000 or less (married couples, this threshold is $65,000) , social security benefits are tax-free. That earning between $50,000 and $60,000 get partial exemption only. The exemption phase for couples filing jointly starts at AGI of between $65,000 and completely exhausts at $75,000.

12. West Virginia

West Virginia taxes people with adjusted gross income above $50,000 for single taxpayers and $100,000 for couples filing jointly.