According to a recent report by GOBankingRates, 41 states in the U.S. will no longer tax Social Security benefits by 2025. Missouri and Kansas joined this group in 2024, leaving only nine states that will still impose taxes on these benefits in 2025. This is a crucial change for retirees planning their finances. Below is a list of states that will still tax Social Security benefits in 2025, along with details on exemptions:
- Utah: Single filers earning less than $30,000 per year and married couples with incomes below $50,000 are exempt from paying taxes on their Social Security benefits.
- Minnesota: Individuals with an AGI under $82,190 and married couples earning less than $105,380 annually are exempt from taxation on Social Security benefits.
- Colorado: Residents aged 55 to 64 with an AGI of $75,000 or less (for individuals) or $95,000 or less (for couples filing jointly) can fully deduct federally taxed Social Security benefits.
- Rhode Island: Residents with an AGI below $88,950 (for individuals) or $111,200 (for couples filing jointly) don’t pay state taxes on their Social Security benefits.
- Connecticut: Single filers with an AGI below $75,000 and couples earning less than $100,000 are exempt from taxes on Social Security benefits.
- New Mexico: Individuals with annual earnings under $100,000 and married couples making less than $150,000 won’t pay state taxes on Social Security benefits.
- Montana: Single filers with an AGI below $25,000 and couples filing jointly with an AGI under $32,000 are exempt from taxes on their Social Security benefits.
- Vermont: Married couples with incomes under $65,000 and individuals earning less than $50,000 annually are exempt from paying taxes on Social Security benefits.
- West Virginia: Currently, individuals earning less than $50,000 and couples with incomes below $100,000 are exempt. West Virginia is phasing out state taxes on Social Security benefits entirely, with reductions of 35% in 2024, 65% in 2025, and full elimination by 2026.