9 States That Will Tax Your Social Security Benefits in 2025: Are You Affected?

Social Security is one of the most important financial support systems for Americans. For millions of people, Social Security benefits are the main or only source of income.

In fact, the Social Security Administration (SSA) provides benefits to over 68 million Americans every month, covering retirement, disability, and survivor benefits.

Since its creation in 1935, the SSA has been helping people who are retired, disabled, or who have lost a loved one who worked and paid into the system.

While Social Security offers important financial assistance, changes are coming in 2025 that could impact how much tax you pay on your benefits. In some states, Social Security benefits will be taxed, which could affect retirees’ budgets.

9 States That Will Tax Your Social Security Benefits in 2025

As of 2025, 9 states will tax Social Security benefits. Here’s the full list of those states and how the taxes will affect recipients:

1. Colorado
   • In Colorado, Social Security benefits are taxed, but there are some exemptions. If you are between 55 and 64 years old, and your adjusted gross income (AGI) is below $75,000 (for individuals) or $95,000 (for married couples), you can deduct your Social Security benefits from your taxes.
2. Connecticut
   • In Connecticut, if your AGI is below $75,000 (for single filers) or $100,000 (for joint filers), your Social Security benefits are not taxed. However, if you earn above these thresholds, you will be required to pay tax on your benefits.
3. Minnesota
   • Minnesota allows an exemption for certain income levels. Single filers with an AGI under $82,190 and married couples with an AGI under $105,380 won’t have to pay tax on their Social Security benefits.
4. Montana
   • Montana offers a deduction on Social Security benefits for individuals with an AGI of $25,000 or less, or joint filers with an AGI of $32,000 or less.
5. New Mexico
   • In New Mexico, Social Security benefits are not taxed if your income is below $100,000 for single filers or $150,000 for joint filers.
6. Rhode Island
   • Rhode Island offers exemptions to people who have an AGI below $88,950 (individuals) or $111,200 (married couples filing jointly).
7. Utah
   • Residents in Utah who make $30,000 or less (single filers) or $50,000 or less (joint filers) will not have to pay tax on their Social Security benefits.
8. Vermont
   • Vermont exempts Social Security benefits from tax for individuals earning less than $50,000 and for married couples with a combined income below $65,000.
9. West Virginia
   • West Virginia is phasing out the taxation of Social Security benefits. While this tax will not be fully eliminated until 2026, in 2025, individuals earning more than $50,000 and couples making over $100,000 will still pay tax. For those in the phase-out process, tax on benefits will decrease by 65% in 2025.

Understanding the Impact of Taxes on Social Security

The reason states tax Social Security benefits is to generate revenue for the state government, which helps fund public services like schools, healthcare, and infrastructure.

However, critics argue that taxing Social Security benefits can put a heavy burden on retirees, especially those who are living on fixed incomes. This is especially true for retirees in middle to upper-income brackets who do not qualify for exemptions or deductions.

For many retirees, Social Security is the main source of income, and any tax on this income can significantly impact their financial security. Understanding how your state handles Social Security taxation will help you plan your finances more effectively.

Tax-Advantaged Retirement Accounts: A Way to Offset Taxes

One way to minimize the financial impact of Social Security taxes is to save money in tax-advantaged retirement accounts.

Accounts like IRAs and 401(k)s allow you to save money for retirement while reducing your taxable income. The interest earned on these accounts is either not taxed or at a lower rate, which can help you keep more of your savings.

Though tax rules can be complex, being well-informed about tax-advantaged options can help you manage your finances better and increase your retirement savings.

Conclusion

If you rely on Social Security benefits, it is crucial to understand whether your state will tax these benefits in 2025.

While nine states will tax Social Security to some extent, different income thresholds and exemptions are in place. Be sure to review your state’s rules to see if your benefits will be affected.

By planning and using tax-saving strategies, you can reduce the financial burden of taxes and maximize the benefits you receive.

Social Security remains an important financial resource, but knowing how taxes will affect your benefits in 2025 will help you make more informed financial decisions.

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