Major Changes in State Taxation of Social Security Benefits by 2025
Overview of Tax Policies Across 41 States as Social Security Benefits Remain Untaxed in Many Areas
GOBankingRates recently highlighted that in 2025, 41 states in America will not tax Social Security benefits. Notably, both Missouri and Kansas decided to stop taxing these benefits beginning in 2024. As a result, only nine states will continue to impose taxes on Social Security in 2025.
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Consider whether your current or ideal retirement state will tax your Social Security benefits. Additionally, discover significant facts about the future of Social Security.
Colorado
As for Colorado, the state will still tax Social Security benefits in 2025. However, there is a deduction available for recipients aged 55 to 64 who have an adjusted gross income (AGI) of $75,000 or less for individuals, and $95,000 or less for couples filing jointly.
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Connecticut
Similarly, Connecticut exempts benefits from taxation for single filers or those married couples filing separately with an AGI below $75,000, and for couples filing jointly with an AGI under $100,000.
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Minnesota
Minnesota also provides an exemption. Individuals with an AGI under $82,190 and married couples earning less than $105,380 do not face taxes on their Social Security benefits.
Montana
In Montana, individuals with an AGI lower than $25,000 and joint filers with an AGI less than $32,000 can fully deduct their Social Security benefits.
New Mexico
New Mexico has eliminated taxes on Social Security benefits for individuals with earnings less than $100,000, and for married couples earning under $150,000.
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Rhode Island
Rhode Island allows individuals with an AGI under $88,950 to skip taxes on their Social Security benefits, as well as couples with AGIs below $111,200.
Utah
For single individuals in Utah with an annual income under $30,000, Social Security benefits are tax-exempt. The same rule applies to married couples with incomes below $50,000.
Vermont
In Vermont, individuals earning less than $50,000 and married couples with an income below $65,000 can avoid paying taxes on their Social Security benefits.
West Virginia
While West Virginia plans to phase out its state income tax on Social Security benefits over the next three years, currently, individuals earning less than $50,000 and joint filers with incomes below $100,000 are exempt. The phase-out begins with a 35% reduction in 2024 and will reach a complete exemption by 2026.
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This information originally appeared on GOBankingRates.com: 9 States That Will Tax Social Security Benefits in 2025
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