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By 2022, only these 12 states will tax Social Security benefits

Mediafeed logo Mediafeed 11/25/2019 Pat Cortland

It might surprise some people to find out that Social Security benefits are not exempt from being taxed, taking a bite out of their potential retirement income. 

Luckily, most states don’t tax Social Security — currently 37 of them, to be exact.

But the number of states that tax Social Security will decrease by one in 2022, when West Virginia residents will be able to exclude 100% of Social Security benefits from their taxable income.

It’s a phased approach: for their 2020 state tax returns, West Virginia taxpayers can shield 35% of Social Security benefits from taxable income. That number goes up to 65% in 2021, before the full 100% in 2022.

Are you currently living in one of the states that taxes Social Security benefits? Check the list at the bottom of this article to find out.

While those states will take a bite from your Social Security benefits, some of the other 37 states don’t have any state income tax at all, including Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. So if you live in one of those states, this may be no big news to you. 

But a heads-up: Just because your state doesn’t tax your Social Security doesn’t mean those benefits can’t be taxed on the federal level.

Provisional income is a measure used by the IRS to determine if recipients of Social Security are required to pay taxes on their benefits. Calculating your provisional income is important because it will give you an idea of whether you can expect to pay federal taxes on your Social Security benefits, regardless of which state you live in. 

The tax rates for provisional income work like this: A single filer whose total is between $25,000 and $34,000, or a joint filer with a total is between $32,000 and $44,000, can pay federal taxes on up to 50% of their Social Security income.

But gathering as much information, including a state’s tax laws, is helpful when faced with a decision.

If your provisional income exceeds $34,000 as a single tax filer, or exceeds $44,000 as a joint filer then you could pay federal taxes on up to 85% of your benefits.  

And if you already don’t live in one of the 13 states below, that decision may be just a little bit easier.

Related video: Social Security on a $75,000 salary (provided by CNBC)

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States that tax Social Security benefits

  1. Colorado
  2. Connecticut
  3. Kansas
  4. Minnesota
  5. Missouri
  6. Montana
  7. Nebraska
  8. New Mexico
  9. North Dakota
  10. Rhode Island
  11. Utah
  12. Vermont
  13. West Virginia (until 2022)

This article originally appeared on Considerable.com and was syndicated by MediaFeed.org.

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