Eight States Still Tax Social Security Benefits, While 42 States and D.C. Exempt Them
Updated
Updated · Yahoo Finance · Aug 24
Eight States Still Tax Social Security Benefits, While 42 States and D.C. Exempt Them
3 articles · Updated · Yahoo Finance · Aug 24
Summary
Eight states currently tax Social Security benefits, leaving retirees in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont exposed to state levies.
42 states and the District of Columbia do not tax those benefits, up from 37 states in 2017, showing a broader shift away from taxing retirement income.
Income thresholds soften the hit in many of the taxing states: Vermont exempts single filers below $55,000, Colorado waives taxes for many retirees, and New Mexico spares about 86% of seniors.
Federal taxes still apply nationwide, with up to 50% of benefits taxable above $25,000 for single filers or $32,000 for joint filers, and up to 85% above $34,000 or $44,000.