# Retirees in these 9 states may lose some Social Security benefits at tax time

## Retirees in these 9 states may lose some Social Security benefits at tax time

Kailey Hagen  
The Motley Fool

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The Motley Fool is a USA TODAY content partner offering financial news, analysis, and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

### Under the header “Retirees in these 9 states may lose some Social Security benefits at tax time”

No one enjoys tax time, but if you're a senior, it can be especially difficult. Not only are you living off a fixed income, but the IRS typically doesn't withhold anything from your retirement account withdrawals upfront, so you may wind up with a bill when you file your return.

Retirement account withdrawals and earnings from a job may not be the only taxable income you have, either. The federal government taxes seniors' Social Security benefits if their income exceeds certain thresholds. If you live in one of the following nine states, you could owe some state Social Security benefit taxes as well.

But before you panic, doublecheck your state's rules because you may be exempt. Here's a more detailed rundown.

#### 1. Colorado

For the 2024 tax year, Colorado enables those 65 and older to subtract the total amount of Social Security benefits that were included in their federal taxable income from their state taxable income. For example, if you owed federal taxes on $5,000 of your Social Security benefits, you could subtract that $5,000 from the Social Security benefits you list on your state tax return.

However, this is only available to single adults with  of $75,000 or less or married couples with AGIs of $100,000 or less. In 2025, Colorado has expanded this rule to all residents 55 and older. The AGI limits still apply.

#### 2. Connecticut

Connecticut doesn't tax the Social Security benefits of all its residents with AGIs under $100,000 for married couples filing jointly or $75,000 for all other filing statuses. Those with AGIs over this limit may qualify for a partial exemption.

#### 3. Minnesota

Minnesota follows a similar path to Colorado in that it exempts some or all federally taxable Social Security benefits from state benefit taxes. The following table outlines the AGI limits for the state's benefit tax for the 2024 tax year:

| AGI | State Benefit Exemption |
| --- | --- |
| $50,000 | $35,000 |
| $100,000 | $50,000 |
| $150,000 | $65,000 |

#### 4. Montana

Montana follows the same rules as the federal government when deciding whether to tax Social Security benefits. It looks at provisional income, which is AGI, plus nontaxable interest from municipal bonds, and half your annual Social Security benefit. The table below outlines what percentage of your benefit could be subject to federal and Montana Social Security benefit taxes based on your provisional income and marital status:

| Provisional Income | Federal Tax Rate | Montana State Benefit Exemption |
| --- | --- | --- |
| $0 - $62,730 | 20% | $0 - $39,200 |
| $62,731 - $125,460 | 22% | $39,201 - $65,460 |
| $125,461 - $248,920 | 24% | $65,461 - $93,460 |
| $248,921 or more | 26% | $93,461 or more |

#### 5. New Mexico

New Mexico residents won't owe state Social Security benefits taxes if their income is under $100,000 for single filers. Married couples filing jointly, heads of household, and qualifying widow(er)s qualify for an exemption if their income is $150,000 or less. For married couples filing separately, they must have $75,000 or less in income to qualify for the exemption.

#### 6. Rhode Island

Rhode Island enables its residents to exempt up to $20,000 per person — $40,000 for married couples — of their Social Security benefits from state income tax. This exemption only applies to the first $1 million in Social Security benefits, not the entire amount.

#### 7. Utah

Utah taxes the Social Security benefits of all its residents. It also has a Social Security tax credit that helps reduce your tax liability. The tax credit varies depending on your filing status and the source of your Social Security income.

For example, if you have a Social Security benefit from a Social Security Administration program, you may qualify for a 25% reduction on your tax liability. If you have a Social Security benefit from a private program, you may be eligible for a 10% reduction.

#### 8. Vermont

Vermont exempts all Social Security benefits from state taxes for those with AGIs under $65,000 for single filers and $130,000 for married couples. There's also a partial credit available for married couples filing jointly with an AGI between $65,001 and $74,999 or for single filers with an AGI between $50,001 and $59,999.

#### 9. West Virginia

West Virginia doesn't tax the Social Security benefits of those with AGIs of $50,000 or less or $100,000 or more for joint filers. For joint filers, the tax is based on their Social Security benefits and their adjusted gross income. The tax is capped at 65% of their adjusted gross income.

If you have any questions about your state's benefit taxes and how they might affect you, consult a tax professional in your area. They can give you personalized advice based on your situation.

_The Motley Fool has a ._

_The Motley Fool is a USA TODAY content partner offering financial news, analysis, and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY._

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