Nine states tax Social Security payments, reducing benefits

In 2025, millions of Americans rely on Social Security payments, but some residents in nine states receive less due to state taxes. This has caused concern among those who depend on these benefits for daily living. The nine states that tax Social Security benefits are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Each state has different rules. For example, Utah has a flat tax rate of 4.55%, while Connecticut allows certain deductions for low-income earners. In contrast, 41 states do not tax Social Security benefits at the state level. However, taxes at the federal level depend on the recipient's total income. If combined income is above certain thresholds, a portion of benefits may be taxed. To help boost their income, experts recommend that workers start saving and investing early. Retirement accounts like 401(k)s and IRAs can help. Employers often match contributions to 401(k)s, providing additional savings benefits. It’s also essential for recipients to understand tax implications. Single filers earning under $25,000 from Social Security usually do not face taxes on those benefits. Joint filers with income under $32,000 are also generally exempt. Overall, while some face deductions due to state taxes, most lower-income residents in the 41 states without state taxation will not encounter these issues.