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California
According to the Federation of Tax Administrators, social security is not taxed in California at state level. However, Californians with a taxable income of up to $1 million do have to pay individual income tax rates between 1% and 12.3%. Those with a taxable income exceeding the $1 million threshold, are taxed an additional 1 percent, in which case the state’s maximum tax rate becomes 13.3%.
If you’re thinking of spending your golden years in the Golden State, here are 10 Ways To Make the Most Out of Life as a Retiree.
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Indiana
When it comes to the personal income tax, Indiana levies a 3.23 percent. The good news is there’s no tax for Social Security benefits. Future Indiana retirees will also be glad to find out that the Hosier State has been named the fifth-most affordable state for homebuyers, according to a 2020 SmartAsset analysis.
“The Hoosier State has the second-lowest average closing costs in the study, at $2,627. Indiana also is tied for the fifth-lowest median listing price per square foot, at $108. It has the seventh-lowest median listing price overall, at $186,000,” as explained in SmartAsset’s “The 10 Most Affordable States to Buy a Home“.
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Iowa
Iowa is among the moderate tax-friendly states. Residents in Iowa have to pay personal income tax rates ranging from 0.33% to 8.53%. However, Social Security benefits are exempt from the Hawkeye State’s income tax, with those receiving such benefits having a full state income tax protection. You might also like: 14 States Where Your Pension Won’t Get Taxed.
35 thoughts on “26 States That Do Not Tax Your Social Security Benefits”
I think it’s double taxation. First we pay when we make the money, then we pay when we receive what we have paid into, and already been taxed on. I really don’t understand this process. The checks are so small anyway, but take out the God awful taxes, and you could almost make it on what you get. Don’t understand.
Thank Ronald Reagan for that. Social Security began being taxed during his Time in the White House.
Don, I lived in Massachusetts for a long time, and when I retired with my state pension, my Social Security was prorated on my pension and drastically cut, thanks, as you say, to Ronald Reagan.. I get a net check of $373/month. It’s been the same amount for five years, since my Medicare costs rise every year. It angers me greatly to think about this! Legislation to correct this abomination has lingered in Congress for years!
Taxes on Social Security was passed by the House of Representatives which had a Democrat majority.
Check how government really works before you comment.
The taxation of Social Security began in 1984 following passage of a set of Amendments in 1983, which were signed into law by President Reagan in April 1983. These amendments passed the Congress in 1983 on an overwhelmingly bi-partisan vote.
Ronald Regan ran on the platform, ” no new taxes…” later , “read my lips, no new taxes “. So much for platform (lies) promises…..
Jeff: “Read my lips. No new taxes.” was George HW Bush.
You are wrong the tax on social security was passed during a democratic presidents term
You are absolutely correct. Smart girl.
Wrong Al Gore voted to tax SS , the vote was a tie and he stepped in and voted yes to the tax.
No, Ronald Reagan tried to abolish Social Security. He was in favor of private retirement funds (mostly due to mismanagement and pork spending rapidly depleting the SS funds account). Our representatives and senators were all for it because they would be coming in on a windfall of available funds while millions of people would be left soon facing retirement with no future income. He was met with opposition when he proposed that everyone who had contributed to SS would be paid back every cent they had ever paid in to include what employers paid in on each person’s account. I was in school at the time and we studied this in depth while it was occurring.
If you do your research you’ll find out that it was Joe Biden tha introduced the bill to start taxing social security.
The social security tax legislation went to legislation in 1983 Thank Joe Biden, he voted twice to tax our Social Security, in 1983 and again in 1993. In 1983 only 50% was allowed taxable under Reagan. In 1993, under Clinton that percentage was bumped up to 85%. This was approved to be used to bolster the SS Trust Fund, not for general revenue. But we know what happens to ALL of our money we send to washington dc, they spend it on Pork!
It’s not your money, it belongs to the government, SHUT UP PEASANT.
How is it the government’s money when you gave it to them? And there’s no reason to be rude.
I agree jack between me and my employer contributions in the years I worked it’s over $237,000 I’ll be long dead before I would collect anywhere near that
Bryan is just saying that in jest, but in this type of forum sometimes you cannot tell. He doesn’t mean it.
Wrong we the people fund social security and that the politicians steal from.
You are so right, Janice! It’s robbery!!
Oklahoma also does not tax Social Security. The taxable portion of Social Security on the federal return is taken as a deduction in arriving at Oklahoma taxable income.
Used to think we lived in the best country in the world. Its sad to see so few impose their will on so many. At one time I could proclaim “this really is a wonderful place to live and bring up a family” without being canceled.
Its like we can never do enough, as though we have not made significant gains in the past several decades.
I fell like the abused child or spouse who keeps getting kicked no matter how hard they try.
Its very difficult staying positive and moving forward with a positive attitude when you are considered enemy number 1 by 50% of the population. All we want is to be left alone to live our lives the way we see fit.
Not looking for gratitude or validation just peace.
There are many more states than listed above that do not tax Social Security benefits as income. In fact, there are only 13 states that do consider Social Security benefits as taxable income.
what states are those that are not listed?
You’re absolutely correct – I live in one of those states – NY doesn’t tax SS benefits
people you have to understand and that is SSI IS MONEY GIVEN TO YOU BUT IT IS NOT FUNDED BY OUR MONEY AND SSDI OR RETIREMENT ARE WHAT IS PUT IN BY US AND TAXED WHEN PUT IN AND SO IT IS CONSTANTLY BEING FUNDED.THE REASON YOU SEE AN OFFSET IN PAY IS WHEN THEY DEDUCT FUNDS IT IS CALLED A WINDFALL,MEANING THE SUPPLEMENT THEY PAY YOU IS TAKEN OUT OF YOUR CHECK SO THEY CAN PAYBACK THE UNFUNDED ACCOUNT WITH SSDI OR RETIREMENT FUNDS.COMMON SENSE IS YOU NEED A CONSTANT FLOW OF MONEY GOING THROUGH THE SYSTEM TO KEEP IT RUNNING AND NOT COMPLETELY IMPLODE AND CRASH.
someone has to be double taxed in order to support the deplorables who refuse to work. The few working people in this country are taxed to death and it is not going to change.
You may have awakened some states like New Jersey and they will probably started developing a new tax bill already!
dOES kENTUCKY TAX SOCIAL SECURITY BENEFITS?
Why are you democrats playing ignorant on this? Democrats had a majority in Congress when Reagan was the President. Gore was the tie breaker in the Senate. If you dislike your ss money being taxes, put the blame on the democrats. Such hypocrisy.
he was framed it was antifa
Ronal Reagan DID NOT start taxing SS, nice try propagandists, he tightened enforcement of social security disability payments because it was being abused like most government programs, Bill Clinton taxed Social Security! It was Bill Clinton’s Tax Reform Act of 1993 that raised taxes on Social Security!
I live in Tennessee, there is no state Income tax here. However the good old Democrats have taken care of things and as much as 85% of my social security has be subject to Federal Income Tax every year since retiring.
Unless I missed it, New York State does not tax SS benefits either.
That’s not true about Pennsylvania. I just filed my taxes and there’s a limit that you’re allowed to earn yearly before you have to pay tax on Social Security. I think that amount is $25,000.
I work all my life and for health reasons I am still working and now because I am working full time S a. Addiction Counselor which I love helping people I have to pay on my social security. I work to make enough money to pay for everything to live without stress