Social Security benefits make a big difference to many Americans’ wallets.
But those extra dollars can be a double-edged sword. While the extra dollars may narrow the affordability gap this year, the benefits could increase household income to meet the threshold for paying taxes on that income.
The federal government taxes your Social Security income if you receive retirement, survivor, or disability benefits and have a certain amount of income in your home. However, some states will still tax that income in 2025. Nebraska is one of the states that eliminated this tax in 2025. And in tax year 2026, West Virginia will also stop taxing these earnings.
Here’s a look at the states that tax your Social Security income and how to make the most of your money.
Does your state tax your Social Security income?
The nine states that will tax Social Security income for the 2025 tax year are:
- Colorado: For Social Security recipients under age 65, the first $20,000 of benefits are exempt from state tax. If you’re 65 or older, your Social Security income is tax-free. There will be a change in 2025, allowing those ages 55 to 64 to take a full tax deduction of up to $24,000.
- Connecticut: Benefits are not taxable if your adjusted gross income (AGI) is less than $75,000 for single filers and $100,000 for married joint filers. However, if your income exceeds these thresholds, 25% of your benefits may be taxed.
- Minnesota: Social Security benefits are fully or partially exempt from Minnesota income taxes. The exemption is phased out to $108,320 for married filers filing jointly and $84,490 for single filers.
- montana: The taxes you pay on your Social Security benefits is determined by your AGI.
- New Mexico: Most Social Security recipients in New Mexico pay no taxes on their income. Single taxpayers with incomes of less than $100,000, married couples filing jointly with incomes of less than $150,000, and married couples filing separately with incomes of less than $75,000 are exempt from Social Security taxes.
- Rhode Island: You don’t get a tax break if your income exceeds $107,000 for single filers or $133,750 for joint filers, or if you’re younger than what Social Security considers full retirement age.
- Utah: If your income is $54,000 or more, your benefits will be taxed. $90,000 or more for heads of households or married couples filing jointly; $45,000 or more for married couples filing separately. If you fall below these thresholds, you may be able to claim a non-refundable credit towards your benefits.
- Vermont: Single taxpayers with an AGI of less than $50,000 and joint filers with an AGI of less than $65,000 pay no tax on their benefits. For all other filers, the income threshold for full exemption is $50,000. Exemptions are phased out beyond these levels.
- West Virginia: This year, an expansion will be made to allow all West Virginia Social Security recipients to qualify for the exemption. For tax years beginning after January 1, 2025, 65% of Social Security benefits included in federal AGI may be deducted.
Is there a way to avoid Social Security taxes?
Social Security benefits can make a big difference in an American’s cost of living, so paying taxes on that extra money can be frustrating and strain your budget.
However, these taxes can be avoided by keeping a few points in mind. First, your state may not tax Social Security benefits at all. This means you don’t have to worry about additional declarations.
Tax experts say if you live in a state that imposes a tax, you should consider that state’s taxable AGI standards. If you are below your AGI, you may be able to avoid tax requirements.
Also, consider when you will start receiving Social Security benefits. If income allows, some Americans prefer to delay collecting Social Security to maximize their check and avoid taxes.
What is the SSA-1099 form? How do I get it?
The Social Security Administration will send you a form in January to keep track of the benefits you received throughout the year.
This is your Social Security Benefits Statement (SSA-1099), which you can use to figure out how much you owe when you file your federal tax return.
Contributor: Medora Lee, Andrea Riquier
