12 States That Tax Social Security Benefits

You may have dreamed of a tax-free retirement, but if you live in one of the states that tax social security, your benefits could take a hit.

picture of money and a Social Security card
(Image credit: Getty Images)

Are Social Security benefits taxable? You can bet your bottom dollar they are – at least by the federal government, which taxes up to 85% of your benefits, depending on your income. But do states tax Social Security? Unfortunately, a dozen states can tack on additional taxes of their own.

States have different ways of taxing Social Security, too. It can be age-based, such as in Colorado where people under 65 may owe taxes on Social Security benefits but older people generally don't. But other states tax Social Security benefits only if income exceeds a specified threshold amount. For example, Missouri taxes Social Security benefits only if your income tops $85,000, or $100,000 for married couples. Then there's Utah, which includes Social Security benefits in taxable income, but allows a tax credit for a portion of the benefits subject to tax. Other states have different methods of taxing your Social Security check.

Also remember that a tax on Social Security doesn't necessarily mean a state is unsuitable for retirement. Colorado, one of the states that taxes at least some Social Security benefits, actually ranks as one of the 10 most tax-friendly state for retirees. That's why it's best to weigh all state taxes when researching the best places to retire. And our list of the 12 states that tax Social Security benefits will help you do just that. For each state, we provide information on the state's sales tax, property tax, and any death taxes. We've also included a link to the state's page in our State-by-State Guide to Taxes on Retirees (opens in new tab), where you can find additional information about taxes on seniors.

[Note: The state-by-state guide to taxes on retirees (opens in new tab) is updated annually based on information from state tax departments, the Tax Foundation (opens in new tab), and the U.S. Census Bureau (opens in new tab). Income tax rates and related thresholds are for the 2022 tax year unless otherwise noted, combined state and local sales tax values are for 2022, and property tax data is from 2021.]

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.