Which States Tax Social Security Disability Benefits?

Social Security payments from the Social Security disability insurance (SSDI) program may be taxable in your state. The majority of states, however, exempt disability benefits from state taxation (meaning disability payments aren't taxed), and more and more states are heading in that direction. (Note this article is about state taxation only; read about when you have to pay federal taxes on your disability benefits.)

Following are the various categories states fall into regarding the taxation of Social Security disability benefits:

• states that have no income tax, including taxes on disability benefits
• states that exempt disability benefits from income tax
• states that tax disability benefits only when the recipient's AGI is over a certain amount, and
• states that tax disability benefits in the same way that the IRS does.

Read on to determine into which category your state falls.

States That Tax Social Security Based on AGI

In the following states, SSDI income is taxed according to the taxpayer's federally adjusted gross income (AGI). Most of these states don't tax recipients whose income falls under certain thresholds, but this exemption is only for older people in some of these states. For more information, you can click on the state to be directed to its tax authority.

• Connecticut. Individual taxpayers are exempt from paying state taxes on their Social Security benefits if their federal AGI is less than $75,000. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $100,000. Those with income above those thresholds have to pay taxes on 25% of their benefits.
• Colorado .People age 55 to 64 who receive Social Security benefits can exclude up to $20,000 of benefits from their state taxable income. Recipients 65 and older can exclude all Social Security benefits from their state taxable income.
• Kansas .Social Security benefits are not taxed for recipients who have a federal AGI of less than $75,000 (single or married filing jointly).
• Missouri .Social Security benefits are not taxed for disability recipients age 62 and older who have a federal AGI of less than $85,000 ($100,000 for married couples).
• Nebraska. Individual taxpayers are exempt from paying state taxes on their Social Security benefits if their federal AGI is less than $45,790. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $61,760. In 2025, no SSDI benefits will be taxed.
• New Mexico .Social Security benefits are not taxed for disability recipients who have a federal AGI of less than $100,000 ($150,000 for married couples).
• Rhode Island. RI taxes some SSDI recipients, but individual taxpayers who've reached full retirement age are exempt from paying state taxes on their Social Security benefits if their federal AGI is less than $88,950. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $111,200 (and they've reached full retirement age).
• Utah .Although Utah imposes taxes on disability benefits, it offers a complicated Social Security credit based on AGI to help reduce the tax.
• Vermont. Individual taxpayers are exempt from paying state taxes on their Social Security benefits if their federal AGI is less than $50,000. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $65,000.
• West Virginia. Individuals who make $50,000 or less ($100,000 for couples filing jointly) can exclude all of their Social Security benefits from their taxable income.

In the instances above, any taxable Social Security benefits are taxed at that state's income tax rate. You may be eligible for other income deductions or credits in your state. For more information, contact your tax professional.

States That Tax Social Security Benefits Using the Federal Method

The following states tax Social Security benefits using basically the same method as the federal government. For more information, you can click on the state to be directed to its tax agency.

• Minnesota (with a new state deduction for some disability benefits that started in 2021), and
• Montana (with a different method for determining the taxable amount).

You may be eligible for disability-related income deductions or credits in your state. For more information, contact your tax professional.