About 14% of Social Security recipients rely on retirement benefits for almost all their monthly income. However, that does not imply that some of them have to pay taxes.
Although 85% of your Social Security can be taxed, a smaller percentage could cause financial difficulties to some retirees in the United States. Taxes on retirement benefits have not always been with us. In fact, they started about 40 years ago. These taxes are only for those who go over the thresholds.
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STATES THAT DO NOT TAX SOCIAL SECURITY IN 2024
In total, there are 40 States that do not tax retirement benefits. Apart from them, Washington, D. C. does not tax retirement benefits either. That means there are 10 States that tax retirement benefits.
Alabama
Alaska
Arizona
Arkansas
California
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
Nebraska
Nevada
New Hampshire
New Jersey
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
South Dakota
Tennessee
Texas
Virginia
Washington
Wisconsin
Wyoming
If you are about to retire, planning tax expenses is essential. Do not forget that even if you do not have to pay taxes on Social Security benefits, you may have to pay other taxes. So, you reflect on your decision before making a move.
STATES THAT TAX SOCIAL SECURITY BENEFITS IN 2024
As you can see, it is becoming unpopular to tax retirement benefits. However, some of these States may not have taxes for low-income retirees on retirement benefits.
The States that have taxes on Social Security benefits are: West Virginia, Vermont, Utah, Rhode Island, New Mexico, Montana, Minnesota, Kansas, Connecticut, and Colorado.
Do not forget to make sure you know the States that have deductions for Social Security beneficiaries who do not exceed the thresholds. But be careful if you are a high earner and are on retirement benefits at the same time.