Slideshow · Money
20 US States Where Taxes Hit Social Security and Retiree Paychecks
Here are 20 states that tax Social Security and senior pensions, ranked.
All 20 Entries in this Story
20. Iowa Repealed Its Benefit Tax But Keeps High Levies
Iowa ended its Social Security tax in 2014, but high local property taxes and sales tax rates continue to strain senior budgets.
19. North Dakota Ended Benefit Taxes After Extended Debate
North Dakota officially repealed taxes on Social Security in 2021, yet winter heating costs and property levies keep expenses steady.
18. Missouri Ended Social Security Taxes Under New Rules
Missouri eliminated income taxes on Social Security in 2024, though private pensions above deduction caps remain taxable.
17. Nebraska Lifted Benefit Taxes But Carries High Rates
Nebraska ended benefit taxes in 2024, yet resident seniors still face some of the highest effective property taxes in the Midwest.
16. Kansas Excluded Social Security Checks In Recent Reforms
Kansas recently repealed its benefit tax, but withdrawals from 401k plans and pensions still face rates climbing up to 5.7 percent.
15. West Virginia Phased Out Its Benefit Tax Over Time
West Virginia completed a phaseout that eliminated benefit taxes, while ordinary retirement account withdrawals remain taxable.
14. Wisconsin Spares Social Security But Taxes Savings
Wisconsin exempts Social Security payments, yet distributions from 401k accounts face income tax rates reaching 7.65 percent.
13. Massachusetts Squeezes High-Balance Retirement Savers
Massachusetts exempts Social Security, but retirement account withdrawals face a flat 5 percent tax plus a millionaires surtax.
12. Illinois Shields Pensions But Holds Crushing Property Tax
Illinois exempts retirement accounts from income taxes, but charges the second highest effective property tax rates nationwide.
11. California Imposes America Highest Income Tax Rates
California spares Social Security checks, yet treats 401k withdrawals as ordinary income with brackets climbing up to 13.3 percent.
10. New York Grants Modest Exclusions Amid Steep Costs
New York offers a 20,000 dollar pension exclusion, yet steep graduated brackets and high property taxes create heavy costs.
9. New Jersey Pairs Deductions With High Property Taxes
New Jersey excludes pension income under 100,000 dollars, but higher earners face top income brackets and record property levies.
8. New Mexico Taxes Benefits Beyond Income Thresholds
New Mexico taxes Social Security for single filers making over 100,000 dollars and joint married filers earning over 150,000 dollars.
7. Colorado Offers Limited Deductions For Younger Retirees
Colorado allows full benefit deductions for seniors 65 and older, but early retirees aged 55 to 64 face partial taxation.
6. Connecticut Enforces Strict Caps On Benefit Deductions
Connecticut taxes Social Security once single income passes 75,000 dollars or joint returns top 100,000 dollars.
5. Utah Uses A Complex Retirement Credit System
Utah taxes Social Security directly at 4.55 percent before granting a retirement credit that phases out as income climbs.
4. Rhode Island Ties Relief To Strict Age And Income Caps
Rhode Island taxes benefits unless residents reach full retirement age and meet strict statutory income limits.
3. Montana Taxes Benefits Using Independent Calculations
Montana applies an independent formula to calculate benefit taxability, which taxes more senior households than federal rules.
2. Minnesota Maintains Rapid Phase-Outs On Benefit Relief
Minnesota offers a benefit subtraction that diminishes quickly for middle earners, pairing with income rates up to 9.85 percent.
1. Vermont Imposes The Strictest Benefit Tax In America
Vermont taxes up to 85 percent of Social Security benefits with low exemption caps and marginal tax rates climbing to 8.75 percent.
