Retirees whose income exceeds a certain threshold face federal income taxes on their Social Security benefits. But the tax obligations don’t stop there for everyone.<\/p>\n
In some places, you might also owe state income taxes on your Social Security benefits. Knowing which states levy these taxes can help you plan for retirement<\/a>.<\/p>\n Here are the states where residents may face extra income taxes on Social Security income.<\/p>\n Make Money: 12 ways to pocket up to $300<\/a><\/p>\n 1. Colorado<\/p>\n Colorado does tax a portion of Social Security benefits, though partial exemptions are available. Residents ages 55 to 64 may exclude up to $20,000 of Social Security income from their state taxable income. Once taxpayers reach age 65, they can deduct up to $24,000 of qualifying pension and annuity income. Colorado applies a flat individual income tax rate of 4.4%.<\/p>\n Who really has the cheapest auto insurance in your area? Check your zip code here.<\/a><\/p>\n 2. Connecticut<\/p>\n Individual Connecticut taxpayers with an adjusted gross income of $75,000 or less can deduct 100% of their Social Security income from their state taxable income. For a married couple filing jointly, the adjusted gross income threshold is $100,000.<\/p>\n Those with an income above those thresholds still get a partial exemption from state taxes. State taxation of Social Security benefits does not exceed 25% of benefits received.<\/p>\n Connecticut income taxes range from 2% to 6.99%.<\/p>\n 3. Minnesota<\/p>\n Minnesota residents can deduct at least a portion of Social Security payments from their state taxable income.<\/p>\n For single taxpayers, those earning $84,490 or less are fully exempt from state Social Security taxes. For married couples filing jointly, Social Security benefits are fully state-tax exempt if your income is $108,320 or less.<\/p>\n Those who earn more than those amounts could pay at least some state taxes on Social Security income.<\/p>\n Minnesota income taxes range from 5.35% to 9.85%.<\/p>\n Avoid these money mistakes: 9 dumbest things smart people waste money on<\/a><\/p>\n 4. Montana<\/p>\n Montana imposes a 5.65% income tax on earnings above $95,000 for joint filers and $47,500 for single filers.<\/p>\n Taxpayers age 65 and older are limited to a $5,500 subtraction from their federal taxable income, and several deductions that once benefited older residents, including a partial interest income deduction, have been eliminated in recent years.<\/p>\n 5. New Mexico<\/p>\n In New Mexico, most retirees are exempt from Social Security taxes. Since 2022, single seniors with less than $100,000 in income and married couples filing jointly with less than $150,000 in income haven’t seen their Social Security benefits subjected to state income tax.<\/p>\n Those with income above these thresholds must pay state taxes on their Social Security benefits, however.<\/p>\n New Mexico’s income taxes range from 1.7% to 5.9%.<\/p>\n 6. Rhode Island<\/p>\n Among married couples filing jointly, state taxes on Social Security benefits apply only when adjusted gross income reaches $133,750 or higher. For most other filing statuses, retirees generally owe state tax on their Social Security income only if their federal AGI is $107,000 or above.<\/p>\n Rhode Island’s income taxes range from 3.75% to 5.99%.<\/p>\n