38 Countries That Don’t Tax Social Security Benefits | personal financing

(Christy Pepper)

Retirees across the United States are not treated equally when it comes to their Social Security checks. There is a simple reason for that. Some countries tax these benefits and others do not.

Specifically, there are 38 states where you don’t have to worry about giving some of your retirement money to the state — and 12 places where a portion of your benefits can go missing.

Image source: Getty Images.

If You Live In These 38 States, You Don’t Have To Worry About Taxing Social Security Benefits

If you live in any one of these 38 states, Social Security taxes shouldn’t be on your radar unless you owe federal taxes. These are the 38 states:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Yes
  • Kentucky
  • Louisiana
  • who
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • 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

People also read…

You also won’t need to worry about statewide Social Security taxes if you live in Washington DC

This means that if you do not have income above the threshold at which the federal government begins assessing taxes, you do not have to pay any part of your benefits to the government. This limit is $25,000 for single tax filers and $32,000 for married tax filers but there is a problem. Temporary income account only. For these purposes, your “income” equals all taxable income, half of your Social Security benefits, and some non-taxable money such as MUNI bond interest. If your income under this definition is not higher than $25,000 or $32,000, your Social Security benefits are yours to maintain your tax-exempt status.

If you live in these 12 states, you need to know the rules

Now, that still means millions of people are stuck paying Social Security taxes statewide. This may be a problem if you live in one of these 12 states:

  • Colorado
  • Connecticut
  • kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

The good news is that not everyone who lives here will be taxed. States usually exempt low-income earners from having to pay part of their benefits to the government. But you need to consider the rules where you live. Your state’s Department of Revenue is a good source for information about whether or not your benefits will be taxed. You can also ask a financial expert. There are volunteer services that offer tax free for seniors, so if you don’t want to pay the accountant, you can use IRS resources to get help.

If you discover that you will be taxed on your benefits, you may want to consider whether losing a portion of your income to your local government is something you disagree with or whether it is worth considering a relocation. Of course there are many factors that go into determining where you will spend retirement, including proximity to family and activities. But since you can choose to live in most parts of the country and keep all your hard-earned retirement benefits, it may be worth considering if a new retirement home could be a good option.

The $18,984 Social Security Bonus Most Retirees Totally Forgot

If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known “Social Security secrets” can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.

Motley Fool has a disclosure policy.

Leave a Comment