State and Federal Taxes on Social Security Benefits in 2025: A General Understanding
Social Security blessings are a big supply of earnings for many American retirees. Although the federal authorities taxes a element of these benefits based totally on income stages, some states also impose state-level taxes on those blessings.
As of 2025, there are 9 states that tax Social Security advantages, and the tax regulations and exemptions imposed via manner of these states variety. It is important for retirees to apprehend these details to be able to maximize their income and decrease tax liability.
Taxation of Social Security Benefits at the Federal Level
At the federal degree, Social Security advantages are taxable, and this tax is based at the retiree’s blended earnings. This includes adjusted gross income (AGI), tax-exempt interest, and half of of Social Security advantages. The following limits are set for taxation of these blessings:
- Individuals: If blended income is among $25,000 and $34,000, up to 50% of blessings are taxable; and if profits is over $34,000, as much as 85% of advantages are taxable.
- Married couples filing at the same time: If combined earnings is among $32,000 and $44,000, up to 50% of blessings are taxable; and if profits is over $44,000, up to 85% of blessings are taxable.
Taxing Social Security Benefits at the State Level
In addition to the federal tax, there are the following nine states that tax Social Security benefits in 2025, and each of these states has its own rules:
Colorado
Retirees age 65 and older are entitled to deduct all federally taxed Social Security benefits from their nation taxable earnings.
People ages 55 to 64 can declare advantages as long as their AGI is less than $75,000 (single filers) or $95,000 (joint filers). The country profits tax fee is four.4%.
Connecticut
Social Security blessings aren’t issue to country tax when unmarried filers’ AGI is below $75,000 and joint filers’ AGI is below $100,000.
For amounts beyond those thresholds, 25% of blessings can be taxed, with the rate among 4.5% and 6.99%.
Minnesota
The state taxes federally taxed Social Security income. However, retirees may receive an exemption depending on income level.
For 2025, those with AGI up to $105,380 (joint filers) and $82,190 (single filers) are eligible for an exemption. The tax rate ranges from 6.8% to 9.85%.
Montana
The nation of Montana consists of federally taxed Social Security benefits in country earnings. Individuals 65 years and older acquire an exemption of $5,660. The kingdom tax rate levels from 4.7% to 5.9%.
New Mexico
Social Security Blessings is released from national tax if single filters have AGI under $ 100,000 and joint filters have AGI under $ 150,000.
The tax rate on income above these thresholds can be 4.9% and up to 5.9%.
Rhode Island
Retirees who’ve reached complete retirement age and whose AGI is much less than $104,200(unmarried filers) or $130,250 (joint filers) are exempt from kingdom tax on Social Security advantages.
The tax price on profits above that range ranges among 3.75% and 5.99%.
Utah
The nation of Utah taxes federally taxed Social Security advantages, but a credit is available to offset the tax for decrease-earnings retirees.
The credit score stages out whilst single filers’ AGI exceeds $37,500 and joint filers’ AGI exceeds $75,000. The kingdom tax price is 4.55%.
Vermont
Social Security advantages are exempt for single filers whose AGI is as much as $50,000 and for joint filers who make up to $65,000.
A partial exemption applies to earnings barely above these thresholds. Tax costs variety from 3.35% to 8.75%.
West Virginia
The state is in the process of eliminating taxes on Social Security benefits. In 2025, 65% of Social Security income will be tax-free, and fully exempt in 2026. Tax rates range from 4.44% to 4.82%.
Implications for Retirees
Retirees who stay in these states need to recognize how state taxes will have an effect on their Social Security advantages.
Certain strategies, which includes offsetting retirement account withdrawals, considering a Roth conversion, or moving to tax-favorable states, can assist reduce tax liability. It is recommended to seek advice from a tax expert to nicely recognize the rules in those states.
FAQs
Which states may tax Social Security checks for retirees?
Nine states, including California, Colorado, and Illinois, may impose taxes on Social Security benefits, depending on income levels and state tax policies.
How do taxes on Social Security checks vary by state?
Each state has its own tax rules, with some taxing benefits based on income thresholds and others offering exemptions for lower-income retirees.
What income levels trigger Social Security tax in these states?
Social Security tax thresholds vary, but retirees earning higher incomes from other sources like pensions or investments may face state taxes on their Social Security benefits.