2023-09-05 23:38:54
Social Security benefits are taxable. Generally, only very low-income taxpayers escape Social Security tax entirely. The rest are taxed up to half of the Social Security payment or, for those with higher incomes, up to 85% of it.
According to the Social Security Administration (SSA), 50% of a taxpayer’s benefits may be taxable if:
File as a single taxpayer, head of household, or qualifying widow(er) with income of $25,000 to $34,000. He is married filing separately and lived apart from his spouse for the entire tax year and has income of $25,000 to $34,000. He is married filing jointly with income of $32,000 to $44,000.
Up to 85% of a taxpayer’s profits may be taxable if:
File a return as a single taxpayer, head of household, or qualifying widow(er) with income greater than $34,000. He is married filing jointly with income greater than $44,000. He is married filing separately and lived apart from his spouse for the entire tax year and has income greater than $34,000. He is married filing separately and lived with his spouse at any time during the tax year.
In addition to federal taxes, Social Security recipients must pay applicable state taxes if they don’t live in one of the 39 states that don’t tax Social Security benefits, as well as the District of Columbia.
It may interest you: On this date the increase in Social Security benefits is officially announced
States where you don’t have to pay taxes on Social Security benefits
The District of Columbia and 39 states do not tax Social Security benefits. On the other hand, eleven states do tax them. Colorado only taxed Social Security benefits received by residents under the age of 65, but as of 2023 these benefits are no longer taxed.
The states in which no tax is paid on Social Security benefits are:
Alabama Alaska (without any income tax) Arizona Arkansas California North Carolina South Carolina Colorado (as of 2023) North Dakota South Dakota (without any income tax) Delaware Florida (without any income tax) Georgia Hawaii Idaho Illinois Iowa Kentucky Louisiana Maine Maryland Massachusetts Michigan Mississippi Nevada (without any income tax) New Hampshire (without any income tax) New Jersey New York Ohio Oklahoma Oregon Pennsylvania Tennessee (without any income tax) Texas ( without any income tax) Virginia West Virginia Washington (without any income tax) Washington DC. Wisconsin Wyoming (without any income tax)
For states where Social Security benefits are taxed, the rates vary by state, as do the exclusions and income limits that apply. These are the Social Security income tax rates in the states that do tax benefits:
Connecticut: 3 to 6.99% Kansas: 3.1 to 5.7% Minnesota: 5.35 to 9.85% Missouri: 0 to 5.4% Montana: 1 to 6.75% Nebraska: 2.46 to 6.84% New Mexico: 1.7 to 5.9% Rhode Island: 3.75 to 5.99% Utah: 4.95% Vermont: 3.35 to 8.75% West Virginia: 3 to 6.5 %
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