13 States That Tax Social Security Income

13 States That Tax Social Security Income Photo by designer491 / Shutterstock.com

Taxes are an unavoidable fact of life — even in retirement.

For example, Social Security benefits may be taxable. In fact, Uncle Sam can tax as much as 85 percent of your benefits.

Unfortunately, the taxation doesn’t necessarily stop there. Many states also tax Social Security benefits. Kiplinger has identified 13 such states.

State taxation of Social Security benefits

Kiplinger reports that the following states tax Social Security income in at least some situations:

  1. Colorado
  2. Connecticut
  3. Kansas
  4. Minnesota
  5. Missouri
  6. Montana
  7. Nebraska
  8. New Mexico
  9. North Dakota
  10. Rhode Island
  11. Utah
  12. Vermont
  13. West Virginia

Keep this list in mind when you decide where to retire.

Federal taxation of Social Security benefits

Whether or not the federal government will tax your Social Security checks depends on your income tax filing status and your income itself.

According to the U.S. Social Security Administration, benefits are generally taxed only if you have “other substantial income” besides your benefits. This could include wages or self-employment income, as well as interest or dividends, for example.

The possible taxation of Social Security income is yet another factor that folks must account for when planning their retirement, lest they wind up with less retirement income than expected or needed. To learn more about making the most of your benefits, check out “Maximize Your Social Security.”

Would you retire to a state that taxes Social Security benefits? Sound off below or over on our Facebook page.

What's next?

Now that you've learned about critical components for a successful retirement, it's time to take the next step. To have the retirement you've dreamed about and the one you deserve, you need a plan that will show you:

  • How to discover fulfillment and live the retirement life you really want
  • Whether to downsize and where to live during your retirement years
  • A simple, proven system to destroy every debt you have
  • How to invest to reach your retirement goals and never outlive your savings
  • How to score up to $12,000 more in Social Security every year
  • Why you don't need a financial planner and how to be your own
  • How to stay in top shape and manage medical costs

The Only Retirement Guide You'll Ever Need is the plan that gives you the knowledge you need to approach retirement confidently -- with the peace of mind we're all after. Learn at your own pace, anytime you'd like, from the comfort of your home. Get expert, personalized advice and access to a special online community where you can connect with others and get your questions answered.

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