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Taxes on Social Security benefits have gotten a lot of attention over the last few months, ever since President Trump vowed to eliminate them on social media. If you owe them, you probably know they can cost you quite a bit. The IRS taxes up to 85% of some seniors’ benefits at ordinary income tax rates, which can amount to thousands of dollars.
That’s difficult enough to swallow. But if you live in one of the nine states listed below, you could face a second benefit tax that could take even more of your checks.
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The nine states that still tax Social Security benefits
State Social Security benefit taxation has been on the decline in recent years, and only nine states still take a cut of some of their seniors’ checks:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia
But living in one of these states isn’t a guarantee you’ll owe your state any of your Social Security checks. Each state has its own laws regarding benefit taxation, and many have exemptions for low- to middle-income seniors.
Check with your state’s department of taxation or a local accountant to learn if you could owe state benefit taxes. It might be possible to avoid them in some cases by taking steps to reduce your taxable income, like limiting your traditional IRA and 401(k) withdrawals.
You should also watch for future changes to your state’s benefit tax laws. For example, Colorado has amended its law for 2025. In past years, it excluded all Social Security benefits taxable at the federal level from state income tax for those 65 and older with adjusted gross incomes (AGIs) of $75,000 or less for individuals or $95,000 for married couples filing jointly. Beginning this year, this also applies to those in the 55 to 64 age range.
West Virginia is in the process of completely phasing out its Social Security tax. Benefits for all seniors with AGIs of $50,000 or less for single adults and $100,000 for married couples filing jointly don’t count toward federal income, and in 2025, 65% of benefits for those with higher AGIs are exempt as well. The state won’t tax any Social Security benefits beginning in 2026.
Federal Social Security benefit taxes
Getting out of paying federal Social Security benefit taxes isn’t that easy. Theoretically, you could do it if you were able to reduce your provisional income. That’s your AGI, plus any nontaxable interest from municipal bonds and half your annual Social Security benefit. But as the table below shows, this is tough to pull off:
|
Marital Status |
0% of Benefits Are Taxable if Provisional Income Is Under: |
Up to 50% of Benefits Are Taxable if Provisional Income Is Between: |
Up to 85% of Benefits Are Taxable if Provisional Income Exceeds: |
|---|---|---|---|
|
Single |
$25,000 |
$25,000 and $34,000 |
$34,000 |
|
Married |
$32,000 |
$32,000 and $44,000 |
$44,000 |
Source: Social Security Administration.
These taxation thresholds aren’t indexed for inflation, so as inflation drives up costs and average Social Security benefits, more seniors find themselves encountering this tax.
When avoiding it isn’t possible, the next best thing you can do is to plan for it, either by earmarking savings to cover the tax bill or by requesting that the Social Security Administration withhold money from your checks directly.
Benefit taxes may become a thing of the past if President Trump succeeds in eliminating them. There is a bill in the House that would do just that, but we don’t know yet whether it will pass. In the meantime, it’s best to plan as if Social Security benefit taxes will remain in place until we learn otherwise.
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