Which States Tax Social Security Disability Benefits?

Social Security payments from the Social Security disability insurance (SSDI) program might be taxable in your state. The vast 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. Kansas, Missouri, and Nebraska have recently phased out state taxation of Social Security benefits.

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.

Which States 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 in some of those states, like Colorado, this exemption is only for older people. For more information, you can click on the state below to be directed to its tax authority.

• Colorado. Coloradans age 55 to 64 are exempt from paying state taxes on their Social Security benefits if their federal AGI is less than $75,000 (or $95,000 if married). Those who earn more than those amounts 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.
• 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 may have to pay taxes on 25% of their benefits.
• Minnesota. Individuals with AGIs below $78,000 (or $100,000 for couples) can subtract all of their Social Security benefits from their taxable income. Those earning more may get a partial break on the tax on Social Security benefits.
• 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 $126,250. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $101,000 (and they've reached full retirement age).
• Utah. Individuals with AGIs below $45,000 (or $75,000 for couples) can deduct all of their Social Security benefits from their taxable income. Those earning more get a partial break on the tax on Social Security benefits.
• 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. Those earning slightly more may get a partial break on the tax on Social Security benefits.
• West Virginia. Individuals with an AGI of $50,000 or less ($100,000 for couples filing jointly) can exclude all of their Social Security benefits from their taxable income. For tax year 2024, those with an AGI of more than $50,000 (or more than $100,000 if a joint filer) will be able to take a modification of 35% of their Social Security income. In tax 2025, this will increase to 65%, and then 100% in tax year 2026.

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.

Which States Tax Social Security Benefits Like the Federal Government?

Only Montana still taxes Social Security benefits using basically the same method as the federal government. The Montana Department of Revenue doesn't tax Social Security benefits for individuals with less than $25,000 in income (or couples with less than $32,000), though it uses a different method than the IRS for determining taxable amounts.

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

Which States Exempt Social Security From Taxes?

The following states do impose income taxes, but all of these states exempt 100% of Social Security benefits from a resident's tax liability. You can click on the state to be directed to its tax authority.

Income Tax-Free States

The following states don't impose state income taxes, so SSDI is not taxed by the state. You can click on the state to be directed to its tax authority.

• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington, and
• Wyoming.

Is Social Security Taxed in U.S. Territories?

If you live in a U.S. territory or possession and receive Social Security benefits, your benefits may be taxable by your government (in addition to any U.S. federal income tax liability.) You can click on the links below to be directed to your government's taxing authority.

• American Samoa
• Guam
• Northern Marianas Islands
• Puerto Rico, and
• U.S. Virgin Islands.

Learn more about federal taxation of disability benefits.