While millions of Americans enjoy tax-free Social Security payments, the impact of federal and state tax regulations can significantly diminish the actual amounts that retirees receive. As of 2025, there are still nine states that impose taxes on Social Security benefits, but this trend appears to be reversing, with Utah leading the charge as it debates the elimination of this tax.
This issue has gained traction recently, as during his campaign, President Donald Trump vowed to abolish federal taxes on Social Security, affecting approximately 40% of the 70 million beneficiaries receiving monthly payments. However, to fulfill this promise, he will require Congressional support, while individual states have the autonomy to determine their own tax policies.
The taxation of Social Security benefits by states is currently under examination. There has been a significant movement against these taxes in recent years, fueled by advocates who argue that these levies unfairly diminish the benefits that Americans have rightfully earned. They contend that removing or reducing state taxes on Social Security could provide vital financial relief for older adults grappling with the rising cost of living. With inflation remaining high, millions of retirees are finding it increasingly difficult to make ends meet, prompting nearly a third of them to consider re-entering the workforce.
This perspective has gained traction across various regions. For instance, Kansas and West Virginia have recently enacted legislation to abolish or gradually phase out taxes on Social Security benefits, reflecting a broader trend in the nation.
In Utah, Governor Spencer Cox, a Republican who was re-elected in November, is advocating for the elimination of the state’s tax on Social Security benefits. According to the Salt Lake Tribune, he believes that this proposal is one of his most popular initiatives in years, as it could potentially save households nearly $1,000 annually. Presently, some Social Security benefits in Utah are taxed at the state’s 4.55% income tax rate, although lower-income households benefit from a tax credit that offsets this cost entirely.
If Utah’s lawmakers approve this change during the upcoming 2026 budget discussions, it would leave only a handful of states that still tax Social Security benefits. Beyond Utah, here’s a detailed look at where Social Security is still taxed in 2025:
Understanding Social Security Taxation in Colorado
In Colorado, although the state maintains a flat income tax rate of 4.4%, only a subset of Social Security recipients is liable for taxes on their benefits. Individuals aged 65 and older can deduct their Social Security payments for state tax calculations. As of 2025, taxpayers aged 55 to 64 who fall below specific income thresholds are also eligible to deduct their Social Security income. However, younger beneficiaries may still be subject to state taxes on their benefits.
Tax Implications for Connecticut Retirees
In Connecticut, retirees are only obligated to pay state taxes on their Social Security benefits if their adjusted gross income exceeds $75,000 for individuals or $100,000 for couples. Notably, even under these conditions, 75% of Social Security benefits remain exempt from state taxes, making it more favorable for many retirees to manage their finances effectively.
Tax Regulations Impacting Minnesota Residents
In Minnesota, married couples filing jointly are exempt from taxes on Social Security benefits if their combined income is below $108,320, while single filers face a threshold of $84,490. Although high-income residents still encounter taxation, there is ongoing legislative movement aimed at completely abolishing taxes on these benefits, which could provide substantial financial relief for many retirees.
Montana’s Approach to Social Security Taxation
In Montana, individuals and married couples with incomes exceeding $32,000 and $25,000, respectively, are subject to taxation on their Social Security benefits. There are deductions available for higher-income taxpayers; however, a recent attempt in 2023 to eliminate this taxation was unsuccessful, highlighting the ongoing debate over this critical issue.
New Mexico’s Exemptions for Social Security Payments
In New Mexico, most taxpayers can avoid state taxes on Social Security benefits thanks to legislation enacted in 2022, which allows single filers earning under $100,000 and married couples earning under $150,000 to fully deduct their Social Security payments from taxable income. However, retirees whose incomes exceed these limits are subject to state income tax ranging from 1.7% to 5.9%, including their Social Security benefits, which can impact their financial stability.
Rhode Island’s Tax Rules for Social Security Beneficiaries
In Rhode Island, residents can avoid state taxes on their Social Security benefits if they have reached full retirement age and their income remains below $104,200 for single filers as of 2024. Unfortunately, retirees who exceed this income threshold will be subject to state income taxes, which range from 3.75% to 5.99%, affecting their overall financial health.
Vermont’s Income Thresholds for Taxing Social Security
In Vermont, individual taxpayers generally are not required to pay taxes on their Social Security benefits if their income is below $50,000, while the threshold for married couples is $65,000. However, for individuals earning above $60,000 and couples above $75,000, state taxes are imposed, and a bipartisan group of lawmakers is advocating for an increase in these income thresholds to alleviate the financial burden on retirees.
West Virginia’s Upcoming Elimination of Social Security Taxes
West Virginia is on track to eliminate taxes on Social Security benefits in the near future. Beneficiaries with higher incomes who were previously subject to these taxes have already seen a 65% reduction under a bill signed last year, with plans for a complete phasing out of these taxes by 2026, providing much-needed relief for retirees across the state.
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