Social security is a major way for people to survive when retiring, and the checks are already subject to federal taxes.
Many states don’t take out state taxes on top of that, effectively minimizing the actual amount people are able to collect.
However, there are 13 states that do take state taxes on social security benefits. They include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.
While these states can collect state taxes, it doesn’t always mean they will. This depends on how much you get as well as other income.
Every state varies in its rules, like Kansas won’t make residents pay taxes if their adjusted gross income of $75,000.
To learn more, you can check with the Department of Revenue in your state.
How much comes out in federal taxes depends on various factors like AGI, or non-taxable interest. People who can pay taxes on up to 50% on their benefits are single people with incomes over $25,000 or married couples with incomes over $32,000. Single adults making over $34,000 and married couples making over $44,000 may owe taxes on up to 85% of their benefits.
The best thing to do is know where you stand and be ready to pay the taxes when the time comes.