US Social Security benefits: Which states tax your payments? Find out with this detailed state-wide list

Social Security benefits are considered a major income source for the retirees in the US. While there are over 40 states in the country that don't tax Social Security benefits, some do consider it as a source of income and subject it to taxes.

As of December 2024, more than 51 million people in the US received retired worker benefits. Several among them relied on it for some or all of their retirement income, USA Today reported.

If you are one of those receiving Social Security benefits or will soon get it, here we guide you through all the states across the US that may subject you to taxes.

Social Security benefits: Eligibility

To be eligible to receive monthly payments based on your lifetime earnings, an individual must be:

1. Aged 62 or older.

2. Having worked and paid Social Security taxes for at least 10 years or more.

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US states that don't tax Social Security benefits

Most of the states in the country do not consider Social Security benefits as taxable income.

According to USA Today, there are 41 states as well as Washington, DC where residents are not required to pay taxes for them.

Among these states are Alabama, California, Alaska, Arizona, Georgia, Arkansas, Delaware, Indiana, Florida, Hawaii, Idaho, Louisiana, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Missouri, Nebraska, Massachusetts, New Jersey, Michigan, Mississippi, Nevada, New Hampshire, New York, Oklahoma, North Carolina, Pennsylvania, South Carolina, North Dakota, Ohio, Oregon, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin and Wyoming.

Where you have to pay tax?

But there are some US states where Social Security benefits are still considered as an income source and subject it to taxes.

Among the nine states where these are taxed include Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia.

As of now, it is difficult to understand for how long these US states will continue to impose tax on Social Security benefits. In few of these states, the legislation is in motion to remove it or reduce it by certain amount.

In West Virginia, a law was earlier enacted to phase out the income tax on Social Security for people earning under $50,000 as well as joint filers getting less than $100,000.

US federal tax rules

Even if you are not required to pay Social Security tax on state level, that does not mean you can do away with federal taxes as well.

The Internal Revenue Service (IRS) takes into consideration an individual's "combined income" to calculate the tax bill. It includes the adjusted gross income (AGI), which is the money people earn except for their Social Security income as well as the interest income exempt from federal taxes.

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As per the law, people are required to pay 50% of their total Social Security benefits for the year.

FAQs

1. What does Social Security mean?
Social Security benefits is referred to the payments that qualified retired adults as well as people with disabilities receive in the US. This provides a source of income to the eligible people when they retire or are unable to work due to a disability.

2. How to apply?
People are required to create a free “my Social Security” account to manage their benefits online.