Tax Break 2024: Discover the 41 States Exempting Social Security Benefits

Tax Break 2024: An increasing number of states have enacted legislation aimed at alleviating the tax liability of Social Security recipients. These are the locations exempt from tax benefits.

Throughout their careers, Americans contribute to Social Security funds via payroll taxes. The Social Security Administration will no longer require them to make contributions upon retirement; instead, they will begin receiving funds, provided they satisfy the necessary criteria.

It would seem that since they have already remitted taxes on their prior earnings, they would not be responsible for additional deductions from their Social Security benefits. Approximately half of the recipients who are presently obligated to remit federal taxes on their social security benefits perceive this erroneously.

In contrast, tax regulations vary considerably from state to state within the United States. Nine states, in addition to thirty-two other states and the District of Columbia, do not levy income tax on Social Security benefits.

Nine states still impose income taxes on Social Security benefits, although they calculate them differently.

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The IRS levies what amount of tax on Social Security benefits?

According to the SSA, the following circumstances may result in 50% of a taxpayer’s benefits being taxable:

• You file as a single taxpayer, head of household, or qualified widow/widow with income of $25,000 to $34,000.
• You have an income of $25,000 to $34,000 and are separated from your spouse for the entire tax year.
• You are married and filing jointly with an income of $32,000 to $44,000.

The benefits are subject to an 85 percent tax rate if:

• You file as a single taxpayer, head of household, or qualified widow/widow with income over $34,000.
• You are married filing jointly with income over $44,000.
• You are separated from your spouse for the entire tax year and have income greater than $34,000.
• You filed your taxes separately and lived with your spouse at any time during the tax year.

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Tax Break 2024: 41 states will not impose taxes on Social Security benefits

State taxes are levied in addition to federal taxes on Social Security recipients, except for those residing in one of the 41 states or the District of Columbia that have ceased taxing Social Security benefits. A bill enacted into law in Missouri in July 2023 eliminates the income tax on Social Security benefits, becoming the most recent state to do so. Social Security benefits were exempt from taxation in Nebraska beginning in 2022 and will remain so until 2024.

• Alabama
• Alaska (no income tax)
• Arizona
• Arkansas
• California
• Colorado* (only those 65 and older)
• Delaware
• Florida (no income tax)
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Mississippi
• Missouri (2024 first year benefits not taxed)
• Nebraska (2024 first year benefits not taxed)
• Nevada (no income tax)
• New Hampshire (no income tax)
• New Jersey
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• South Carolina
• South Dakota (no income tax)
• Tennessee (no income tax)
• Texas (no income tax)
• Virginia
• West Virginia
• Washington (no income tax)
• Washington DC.
• Wisconsin
• Wyoming (no income tax)

The counties that tax Social Security benefits are counted

The rate of taxation varies among the nine jurisdictions that levy taxes on Social Security payments received by beneficiaries in 2024.

• Colorado (only those under 65): flat 4.4%
• Connecticut: 3 to 6.99%
• Kansas: 3.1 to 5.7%
• Minnesota: 5.35 to 9.85%
• Missouri: 0 to 5.4% (2023 last year benefits taxed for incomes over $85K, individuals & $100K joint filers)
• Montana: 1 at 6.75%
• Nebraska: 2.46 to 6.84% (2023 last year benefits will be taxed)
• New Mexico: 1.7 to 5.9%
• Rhode Island: 3.75 to 5.99%
• Utah: 4.95%
• Vermont: 3.35 to 8.75%

The rate at which benefits are computed depends on the total income received or earned by the Social Security recipient. Inversely proportional to income, the rate increases.