For millions of Americans, Social Security benefits are the primary source of income. Whether it’s for retirement, disability, or essential assistance, these monthly checks help people cover basic expenses like rent, groceries, and medical bills.
However, in some states, Social Security benefits are taxed, which can make a big difference to recipients. Let’s dive into which states tax Social Security benefits and how it might affect your finances.
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What Are Social Security Benefits?
Social Security benefits are payments made by the government to people who have worked for a certain number of years and paid into the system. These payments are especially important for seniors, those with disabilities, and low-income families.
Social Security helps them meet daily needs such as buying groceries, paying for utilities, and even covering healthcare costs.
Which States Tax Social Security Benefits?
While Social Security is typically tax-free for most people at the federal level, some states impose their own taxes on these benefits. As of 2026, eight states continue to tax Social Security benefits:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
This means that if you live in one of these states, you may need to pay state taxes on your Social Security benefits, depending on your income and filing status.
How Each State Handles Social Security Taxation
Not all of these states tax Social Security benefits the same way. Below is a breakdown of the tax rules for each state:
| State | Tax Rules |
|---|---|
| Colorado | Full exemption for seniors 65+; partial exemptions based on income for those 55-64. |
| Connecticut | Exempt if AGI is below $75,000 (single) or $100,000 (joint). Partial exemptions above these limits. |
| Minnesota | Full exemption for AGI under $84,490 (single) or $108,320 (joint). Partial exemption above these levels. |
| Montana | No tax if AGI is under $25,000 (single) or $32,000 (joint); partial tax above these thresholds. |
| New Mexico | Full exemption for AGI under $100,000 (single) or $150,000 (joint). Regular tax rates above these limits. |
| Rhode Island | Exemption for seniors 65+ with AGI under $104,200 (single) or $133,250 (joint). Taxed above these limits. |
| Utah | Taxes up to 85% of benefits at a flat rate of 4.5%. Nonrefundable credit available to reduce tax. |
| Vermont | Full exemption for AGI under $50,000 (single) or $65,000 (joint); partial exemption above these limits. |
How Do These Taxes Affect You?
Social Security taxation can vary significantly depending on your state, income, and filing status. For example, in states like Colorado, seniors 65 and older can fully deduct their federally taxable benefits, meaning they don’t pay state tax.
However, in Minnesota, the exemption decreases as your income increases, which means higher-income retirees may still face some state taxes on their benefits.
It’s important to understand your state’s rules to avoid any surprises when tax season arrives. The rules can also change over time, so it’s always a good idea to check your state’s tax website or consult a tax advisor for the most accurate information.
What States Don’t Tax Social Security Benefits?
If you’re not in one of the states that tax Social Security, you’re in luck. Many states, including Florida, Texas, and Washington, don’t tax Social Security benefits at all. This can make living in those states an attractive option for retirees who rely on Social Security as their primary income.
While many Americans rely on Social Security to meet their basic needs, it’s crucial to know whether your state taxes these benefits. Currently, only eight states tax Social Security benefits, but the rules vary widely depending on the state and your income level.
Always check your state’s tax laws to ensure you’re prepared for any changes. If you live in one of the states that taxes Social Security, there may be exemptions or credits available to help reduce your tax burden.
FAQs
Which states tax Social Security benefits?
Eight states—Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont—tax Social Security benefits.
Are Social Security benefits taxed at the federal level?
Yes, depending on your overall income, Social Security benefits may be taxed at the federal level.
Can I get an exemption from Social Security taxes?
Many states offer exemptions or credits based on income and age, so it’s important to check the rules in your state.