Millions of retirees rely on every dollar of their monthly check; these holdout states still want a slice.
For the 62 million Americans drawing retirement benefits, the math feels simple: you paid in, you cash out. Yet nine states—Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia—will continue treating those benefits as taxable income in 2025. If you live in one of them, brace yourself.
Which nine states will continue taxing Social Security benefits in 2025 and why it matters to retirees watching every cent
Gallup says six in ten retirees call benefits a “major” income source, so losing even a few hundred dollars can sting. Colorado lets seniors under $75,000 AGI exclude all benefits, but younger residents or higher earners see the excess taxed at 4.4 percent.
Connecticut shields singles below $75,000 and couples under $100,000, yet up to 25 percent of benefits face rates up to 6.99 percent once you cross the line. Wondering about Montana? Any federally taxable amount flows straight into the state…
How each state’s exemptions, thresholds, and rates could dent a retiree’s budget in the new year if no planning is done
Need the numbers at a glance? Peek at the table below, then ask yourself: could you afford these deductions month after month?
| State | Income shield for full exemption | Tax on remaining benefits |
|---|---|---|
| Colorado | $75k single / $95k joint (65+) | 4.4 % after $20k deduction |
| Connecticut | $75k single / $100k joint | Up to 25 % at 4.5–6.99 % |
| Minnesota | $84,490 single / $108,320 joint | 6.8–9.85 % phased in |
| Montana | None; federal amount taxed | 4.7–5.9 % after $5,660 age‑65 break |
| New Mexico | $100k single / $150k joint | 4.9–5.9 % on full federal portion |
| Rhode Island | $104,200 single / $130,250 joint | 4.75–5.99 % above limit |
| Utah | $45k single / $75k joint | 4.55 %; credit phases out |
| Vermont | $50k single / $65k joint | 3.35–8.75 % above partial range |
| West Virginia | $50k single / $100k joint | 35 % at 4.44–4.82 %; ends 2026 |
The House‑passed One, Big, Beautiful Bill Act proposes an extra $4,000–$6,000 federal deduction, but the Senate hasn’t weighed in. Until then, recipients may adjust withholding, pad an emergency fund, or—if feasible—move to a friendlier state. Thinking about relocating? Crunch the numbers before calling the movers.
Nine holdout states still tax Social Security in 2025. Check your bracket, watch for new legislation, and talk with a trusted tax adviser before April. Every dollar counts in retirement.