While the modest benefits increase—intended to compensate for rising prices due to inflation—will generally be welcome, it’s important to check whether the added dollars will void tax exemptions on your Social Security income.
While most states do not tax Social Security benefits, some do and each has its own rules based on your age or your income.
Here’s the list of the 10 states that tax your benefits and their conditions.
- Colorado: Taxpayers over the age of 65 may deduct the full amount of federally taxable Social Security income, as well as other forms of pension and annuity income up to $24,000, with only $20,000 for those aged 55 to 64. A new law will extend the $24,000 maximum to those aged 55 starting in 2026 for income earned in 2025.
- Connecticut: No tax on Social Security benefits for single recipients with adjusted gross income (AGI) below $75,000 and for married joint filers below $100,000. If your income exceeds those thresholds, up to 25 percent of your Social Security benefits may be taxed.
- Minnesota: The North Star state exempts Social Security benefits fully or partially, with exemptions phasing out at $105,380 for jointly filing married couples and surviving spouses, at $82,190 for singles, and $52,690 for married recipients.
- Montana: Social Security benefits are taxed like any other ordinary income. Singles pay 5.9 percent and 4.7 percent tax if their income is lower than $21,100. This threshold is raised to $31,700 for heads of households and to $42,200 for jointly filing married couples and qualified surviving spouses. Taxpayers aged 65 and over receive a $5,500 subtraction.
- Nebraska: The state’s phase-out of the taxation of social security benefits is in its last year, with 80 percent of Social Security benefits exempt from tax. 2025 Social Security checks will be completely exempt from taxes.
- New Mexico: Most people will be exempt from tax on their Social Security benefits. The exemption is available to single taxpayers with incomes lower than $100,000, to married couples filing jointly, surviving spouses, and heads of household with incomes lower than $150,000, and to married couples filing separately with incomes lower than $75,000.
- Rhode Island: The Ocean State requires you to be of “full retirement age” to enjoy Social Security tax exemptions, capped at AGIs of $104,200 for single filers, and $130,250 for married couples filing jointly.
- Utah: Tax exemptions exist for incomes lower than $45,000 for single filers; $75,000 for heads of households or married couples filing jointly; and $37,500 if married filing separately. You may also be able to claim a nonrefundable credit for your benefits.
- Vermont: Single filers with AGI below $50,000 and joint filers with AGI below $65,000 are wholly exempt. For all other filers, the full exemption income threshold is set at $50,000.
- West Virginia: For married couples filing jointly with incomes of and above $100,000, benefits may be taxed. For single filers, the threshold is set at $50,000.
If your income is close to any of these thresholds, the best way to avoid paying taxes on your Social Security benefits is to limit your income by investing in a Roth Individual Retirement Account (IRA)—whatever you put into this account isn’t counted as taxable income.
You are allowed to contribute a maximum of $7,000 to your IRA for 2024. If you are 50 or older, you can make an additional “catch-up” contribution of $1,000. These caps are reviewed annually.
When it comes to federal taxes, President Donald Trump in July 2024 said he wanted to stop taxing all Social Security income for seniors. The trend now appears to be that states are phasing out taxing Social Security benefits.
