38 States That Don't Tax Social Security Benefits

Major Points

  • Twelve states tax at least a portion of Social Security benefits.
  • Retirees can take advantage of these perks tax-free under the remaining 38.
  • When determining where to live, retirees should take Social Security taxes into account.

When it comes to receiving Social Security payouts, retirees in different parts of the country are not treated similarly. That is the case for a straightforward explanation. These benefits are taxed in some states but not in others.

Social Security Benefits Aren't Taxed in 38 States

In particular, there are 12 states where you can lose some of your benefits and 38 states where you won't have to worry about providing the state with a portion of your retirement income.

You won't have to worry about paying taxes on your Social Security income if you reside in one of these 38 states.

If you reside in one of these 38 states, you don't need to worry about Social Security taxes unless you owe federal taxes. The 38 states are as follows:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Nevada
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming
If you reside in Washington, D.C., you won't also have to worry about paying Social Security taxes at the state level.

This means that you won't have to pay any of your benefits to the government if your income is below the level at which taxes are first assessed by the federal government. There is a catch. This barrier is $25,000 for single taxpayers and $32,000 for married couples. Only provisional income is taken into account. Your "income" for these purposes consists of all taxable income, half of your Social Security benefits, and certain non-taxable income, such as interest from MUNI bonds. If your income is below $25,000 or $32,000, you can keep all of your Social Security benefits without having to pay taxes on them.

Learn the laws if you reside in one of these 12 states.

Therefore, millions of people are still forced to pay Social Security taxes at the state level. If you reside in one of the following 12 states, this may be a problem:

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

The good news is that not every resident will be subject to taxes. States often do not require lower earnings to contribute any of their benefits to the federal government. You must, however, research the laws that apply where you live. If you want to know if your benefits will be taxed or not, contact the department of revenue in your state. A financial expert is another option. If you don't want to hire an accountant, you can get help from the IRS tools. There are also volunteer services that help the elderly do their taxes for free.

If you learn that you will be taxed on your benefits, you might want to consider whether you are okay with giving up a portion of your income to your local government or whether it would be better to consider moving. Naturally, there are a lot of considerations when determining where to spend your retirement, such as accessibility to loved ones and activities. But since you can live wherever you like and preserve all of your hard-earned retirement benefits, it could be worthwhile to think about if a new retirement community would be a smart choice.

Most retirees entirely ignore the $18,984 Social Security benefit.

If you're like the majority of Americans, your retirement funds are a few years (or more) behind. However, a few obscure "Social Security secrets" may be able to increase your retirement income. One simple method, for instance, might increase your income by up to $18,984 a year! We believe that once you understand how to optimize your Social Security benefits, you will be able to retire with the assurance and peace of mind that we all seek.


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