Whether you’re retired or nearing retirement, it’s worth considering what states in the US tax Social Security Benefits. TaxFoundation.org has put together some great information on how each state handles Social Security taxes.
Eight states and the District of Columbia don’t have any income tax. Those states are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Most of the other states with income taxes exclude Social Security benefits from taxable income.
States That Tax Benefits
That leaves 13 states that have some level of taxation on these benefits. Nine states offer some reduction in the level of taxation based on certain age or income levels. They are: Colorado, Connecticut, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Rhode Island, and Vermont.
Two states, New Mexico and Utah, include all Social Security benefits in the taxable income base. But Utah allows a tax credit to do away with liability for those earning under certain income thresholds.
The remaining two states, Montana and West Virginia, have different approaches and formulas for determining the tax liability of certain Social Security benefits. However, West Virginia is in the process of ultimately phasing out all taxation of benefits by 2022.
Council of Seniors Wants You To Get What You Deserve
Extra retirement income is welcome at any time. Here at Council of Seniors, we’re fully committed to getting Congress to pass The SAVE Benefits Act. This bill is needed to make up for the Social Security cost of living adjustment (COLA) that was too low or not even implemented over a number of years. Even though the COLA is expected to increase next year, you still deserve the money you are entitled to. Passage of The Save Benefits Act will reimburse seniors $581.
Please sign our petition. Working together we can show politicians in Washington that this bill is crucial for seniors.
Do you think it’s fair to tax Social Security benefits? Leave us a comment and let us know.
We’d love for you to connect with us on Facebook and Twitter!