Most retirees assume their Social Security benefits are safe from state taxes. And in most places, that’s true. But in nine states, you could still owe taxes on part of your benefits—even if you’ve already paid federal taxes on them. Confusing? Definitely. But let’s walk through what this actually means for your retirement income.
At the federal level, the IRS taxes up to 85% of your Social Security benefits depending on your combined income. That includes your adjusted gross income, any tax-exempt interest, and half of your Social Security payments. If that total passes certain thresholds, Uncle Sam takes a cut.
Now let’s talk about the states that still tax these benefits. The rules aren’t the same across the board, and they often depend on how much you make, how you file, or even how old you are.
Table of Contents
Overview
Here’s a list of the nine states that currently tax Social Security benefits in some way:
| State | Taxes Benefits? | Key Factor(s) |
|---|---|---|
| Colorado | Yes | Age and income |
| Connecticut | Yes | Income thresholds |
| Minnesota | Yes | Income-based sliding scale |
| Montana | Yes | Low income threshold |
| New Mexico | Yes | Higher income exemption limits |
| Rhode Island | Yes | Moderate income limits |
| Utah | Yes | Income + tax credit system |
| Vermont | Yes | Steep phase-out by income |
| West Virginia | Yes (phasing out) | Income-based deduction (65% in 2025) |
Let’s cut into how each one works.
Colorado
In Colorado, the rules depend heavily on your age. If you’re 65 or older, you can subtract all your Social Security benefits from your taxable income. If you’re between 55 and 64, it depends on your income. For single filers making under $75,000 or joint filers under $95,000, you can deduct the full amount. Above those limits, the deduction is capped at $20,000.
Connecticut
Connecticut offers a full exemption for those with adjusted gross income up to $75,000 (single) or $100,000 (married filing jointly). If you earn more than that, up to 25% of your benefits may be taxed. It’s a partial system based on income, so you could still see some savings even if you’re slightly over the threshold.
Minnesota
Minnesota’s approach is more complex. Married couples filing jointly with income up to $108,320 get full exemption. Single or head-of-household filers are exempt up to $84,490, and those married but filing separately are covered up to $54,160. If you exceed those limits, the state starts taxing a portion of your benefits based on a sliding scale, and if you’re well above, your benefits are taxed the same way as they are federally.
Montana
Montana has one of the lowest thresholds. If your adjusted gross income is under $25,000 for singles or $32,000 for joint filers, your Social Security benefits are fully exempt. Go over those limits even slightly, and part of your benefits become taxable. It’s a steep drop-off, so careful tax planning matters here.
New Mexico
New Mexico used to tax Social Security broadly but now offers full exemptions for:
- Single filers earning under $100,000
- Married couples filing jointly under $150,000
- Married filing separately under $75,000
If you earn more than these amounts, you may owe tax, but most retirees are likely to fall under the exemption.
Rhode Island
In Rhode Island, income limits are more generous than in some other states. For married couples filing jointly, the exemption applies if income is $130,250 or less. Single and head-of-household filers are exempt if they make $104,200 or less. That’s a decent range for middle-income retirees.
Utah
Utah uses a unique system. It may tax Social Security benefits based on income and filing status but offers a retirement tax credit that can reduce or completely eliminate the tax. The actual calculation involves a worksheet, so results can vary based on several personal factors.
Vermont
Vermont fully exempts Social Security benefits for married couples filing jointly earning $65,000 or less and for all other filers making $50,000 or less. Above those income levels, the exemption phases out quickly. Once you pass the upper threshold, no benefits are exempt, so you’ll pay full tax on what the federal government already taxes.
West Virginia
West Virginia is currently phasing out its tax on Social Security benefits. For 2025, taxpayers with adjusted gross income under $50,000 (single) or $100,000 (joint) can deduct 65% of their benefits. The good news? The state plans to eliminate this tax entirely starting in 2026.
FAQs
Which states still tax Social Security?
Nine states tax Social Security in some form as of 2025.
Is federal Social Security income taxable?
Yes, up to 85% can be taxed based on total income.
Does age affect taxes in Colorado?
Yes, full exemption applies for those 65 and older.
Will West Virginia end its tax?
Yes, West Virginia plans to end it starting in 2026.
Can I avoid taxes by moving states?
Yes, moving to a no-tax state can lower your tax bill.
