Retirees in These 12 States Risk Losing Some of Their Social Security Checks


You may know that Social Security can be taxable, but did you know that federal income taxes are only part of what you have to pay? There are a dozen states that also have their own taxes on Social Security income.

In this article, we’ll look at how Social Security benefits can be taxed by the IRS, which states have their own Social Security benefits tax structure, and why it’s important to understand how taxes on your retirement benefits work.

Image source: Getty Images.

Social Security can be taxable for many retirees

At the federal level, Social Security income may be taxable if your income exceeds a certain amount. To determine whether your distributions are subject to tax, the IRS uses a figure called your “combined income,” which consists of your taxable income, tax-free interest, and half of your Social Security benefit.

If you are single and your combined income is less than $25,000, your Social Security benefit is tax-free. On the other hand, a combined income of more than $25,000 makes as much as 50% of your benefit taxable, and if it’s more than $34,000, as much as 85% of your Social Security income can be subject to federal income tax. If you are married and filing a joint return, the income thresholds are $32,000 and $44,000, respectively.

The short summary is that if Social Security is essentially your only source of retirement income, you probably won’t have to pay taxes on your benefits. But if you have a Social Security check, pensions, and/or taxable withdrawals from a 401(k) or other retirement account, chances are your income will be above the taxability threshold and some of your benefits will be considered taxable income. In total, just over half of all Social Security beneficiaries will have to pay taxes on some of their retirement benefits.

12 States Have Their Own Social Security Taxes

I won’t keep you in suspense. There are a dozen states that will tax Social Security benefits as of 2022, and here’s the list in alphabetical order:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

All of these states have their own methodology when it comes to taxing benefits, and as with federal tax law, not all residents will end up paying taxes on their Social Security income. And the good news is that in most cases, the income thresholds above which benefits become taxable are significantly higher than those set by the federal government. To name just a few examples, both Connecticut and Kansas only tax Social Security benefits for residents who earn $75,000 or more.

We won’t go through every individual state and its Social Security tax laws here. But if you’re a resident of one of these states, it’s definitely a good idea to familiarize yourself with how Social Security and other retirement income is taxed before claiming your benefits.

How It Can Affect Your Retirement?

You may have heard the saying, “It’s not about how much you earn, but how much you have left over.” And that is especially true in retirement. The overall goal of a financially secure retirement is to generate enough income from all sources (retirement accounts, pensions, social security, etc.) to comfortably cover your living expenses.

For this reason, it’s important to have as accurate a picture as possible when it comes to the income you can expect from Social Security. Although it is usually not worth moving to another state only Because your retirement income is taxable, it is certainly an important piece of the puzzle to consider in your retirement planning.

The Valley Voice
The Valley Voice
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.


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