GoBankingRates recently reported on the 41 U.S. states that will not tax Social Security benefits in 2025. Missouri and Kansas opted to stop taxing benefits in 2024, leaving only 9 states in the union that will continue to tax benefits provided by the Social Security Administration (SSA) to U.S. citizens. Knowing which states will be taxing Social Security benefits in 2025 is very important. It will help you know whether or not you will have to send money to the U.S. government and give you more control over your finances. That’s why today we’re going to list each of the states that will tax benefits.
List of states that tax SSA benefits
- Colorado: In 2025, Colorado will continue to tax Social Security benefits. However, it should be noted that beneficiaries between the ages of 55 and 64 with an adjusted gross income of $75,000 or less (single) or $95,000 (married filing jointly) will be able to fully deduct federally taxed benefits.
- Connecticut: Connecticut has an exemption policy similar to Colorado’s: for single taxpayers whose adjusted gross income (AGI) is less than $75,000, benefits are not tax adjusted. The same is true for married taxpayers filing jointly, although they must have income of less than $100,000 to qualify.
- Minnesota: Minnesota also offers a tax exemption on Social Security benefits in 2025. Married taxpayers with AGI under $105,380 or individuals with AGI under $82,190 will pay no tax.
- Montana: All benefits accessed by Social Security citizens are tax deductible for single filers with an adjusted gross income of less than $25,000. While, for joint filers, AGI must be less than $32,000.
- New Mexico: New Mexico has eliminated taxes on Social Security benefits in 2025. Those who will benefit from this exemption will be those individual beneficiaries with annual earnings of less than $100,000 and for married filers earning less than $150,000 gross per year.
- Rhode Island: Individuals in Rhode Island who earn less than $88,950 AGI can invite state taxes on their benefits. The same is true for married couples with annual incomes of less than $111,2000.
- Utah: If the person filing as a single in Utah earns less than $30,000 a year, Social Security benefits will be tax exempt. The same is true for married couples earning less than $50,000 per year.
- Vermont: In Vermont, married couples earning less than $65,000 are exempt from paying taxes on their Social Security benefits. For single individuals filing individually, the limit has been set at $50,000 per year.
- West Virginia: West Virginia will phase out state income tax on Social Security benefits. However, this will take place within 3 years, thanks to a recently passed law. For now, individuals earning less than $50,000 per year and joint filers earning less than $100,000 will be exempt. The phase-out will begin with 2024 taxes, which will be reduced by 35%. In 2025, the reduction will be 65%, and then there will be no Social Security taxes at all starting in 2026.
Additional analysis for 2025 on the state to tax or exempt Social Security benefits
A state’s decision to tax or exempt Social Security benefits in 2025 is based on factors such as revenue collection, tax competitiveness, and the demographics of its retirees. Many states seek to attract seniors with tax incentives, as this group contributes significantly to the local economy through goods and services. At the same time, some state governments believe that maintaining a tax on Social Security benefits could sustain essential public programs, especially in areas such as healthcare and infrastructure. This is relevant in a context of inflation and financial instability, where securing a reliable revenue base can be critical. In addition, each state carefully analyzes the balance between the tax burden and the retention of retired residents, as an exodus of older taxpayers could negatively impact long-term economic growth.
