Most countries don’t charge social security tax, but some still do – See list

Social Security benefits make a big difference in many Americans’ wallets.

But these extra dollars can be a double-edged sword: While the extra dollars may close the gap in purchases this year, the benefit can increase household income, meeting the threshold for paying taxes on those earnings.

The federal government levies Social Security taxes if you receive retirement, survivor and disability benefits and your household makes a certain amount of money. But the selected number of states’ tax revenue is 2025, too. Nebraska is the only state to reduce this tax by 2025. And in the 2026 tax year, West Virginia will also stop charging this benefit.

Here’s which states will tax your Social Security wages and how to get the most out of your dollar.

Will your state pay taxes on your Social Security benefits?

Here are the nine states receiving the Social Security tax for the 2025 tax year:

1. Colorado: For Social Security recipients under age 65, the first $20,000 of their benefits are tax-free. If you’re 65 or older, you won’t be taxed on any of your Social Security benefits. There is a change for 2025 – those aged 55 to 64 can take a deduction of up to $24,000.
2. Connecticut: If your adjusted gross income (AGI) is less than $75,000 for single filers and $100,000 for married joint filers, the gains are not taxed. However, if your income exceeds those limits, 25% of your earnings may be taxed.
3. Minnesota: Social Security benefits are completely or partially exempt from Minnesota income tax. The exemption comes out to $108,320 if you are married filing jointly or $84,490 for married couples.
4. Montana: Your AGI will determine how much tax you pay on your Social Security benefits.
5. New Mexico: Most Social Security recipients in New Mexico do not pay taxes on their earnings. Single taxpayers with an income of less than $100,000, married couples filing jointly earning less than $150,000, and married couples filing separately less than $75,000 are subject to Social Security taxes.
6. Rhode Island: If your income exceeds $107,000 for individual filers or $133,750 for joint filing, or if you’re younger than what Social Security considers full retirement age, you don’t get the tax break.
7. Utah: Your benefits will be taxable if your income is $54,000 or more, $90,000 or more if you are head of household or married filing jointly, or $45,000 if married filing separately. Under those limits, you may be able to claim a non-refundable credit for your benefits.
8. Vermont: Single taxpayers with an AGI of less than $50,000 and joint filers with an AGI of less than $65,000 pay no tax on their gains. For all other filers, the income limit for the full exemption is $50,000. Exemption comes outside of those standards.
9. West Virginia: This year marks an increase so that all West Virginia Social Security recipients are eligible for the exemption. For taxable years beginning on or after January 1, 2025, 65% of the amount of Social Security benefits earned and included in federal AGI may be excluded.

Is there a way to avoid taxes on Social Security?

Social Security benefits can make a big difference for Americans in the cost of living, so paying taxes on that extra money can be frustrating and strain the budget.

But these taxes are avoidable with a few things in mind: First, your state may not tax your Social Security benefits at all, meaning you don’t have to worry about contributing more.

If you’re in a tax-paying state, consider your state’s AGI threshold for tax purposes, tax experts say. If you are below that AGI, you may be able to avoid the tax requirements.

Also, consider when you start Social Security benefits: If your income allows it, some Americans prefer to delay collecting Social Security to maximize their checks and avoid taxes.

What is the SSA-1099 form and how do you get it?

To help you find out how much you received in benefits during the year, the Social Security Administration should send you a form in January.

This is your Social Security Benefit statement, or SSA-1099, and it can be used to find out how much you owe when you file your federal tax return.

Contributors: Medora Lee, Andrea Riquier

This article first appeared in USA TODAY: Most states don’t pay Social Security taxes, but some still do. See the list.

Reported by Nicole Fallert, USA TODAY / USA TODAY

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