Does My State Tax Social Security Disability Benefits?

Twelve states tax Social Security and SSI disability benefits while the others don't.

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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, and more and more states are heading in that direction. (Note this article is about state taxation; 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 a tax on disability benefits
  • states that exempt disability benefits from income tax
  • states that tax disability benefits only when the recipient's AGI is under 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). Some states exempt recipients whose income falls under certain thresholds. 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 under 65 who receive Social Security benefits can exclude up to $20,000 of benefits from their state taxable income. Recipients 65 and older can exclude up to $24,000 of benefits from their state taxable income. Also, in Colorado, whatever amount of Social Security income that is not taxed by the federal government does not get added back into the recipient's adjusted gross income when determining tax liability. Note: Beginning with the 2022 tax year, those 65 and older can deduct all Social Security benefits from their 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 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 $44,460. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $59,960.
  • Rhode Island. Individual taxpayers 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.
  • Utah. Although Utah imposes taxes on disability benefits, as of 2021, 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 $45,000. Married taxpayers who file jointly are exempt from paying state taxes on their Social Security benefits if their federal AGI is below $60,000.
  • West Virginia. For the 2021 tax year, individuals who make $50,000 or less ($100,000 for couples filing jointly) can exclude 65% of their benefits from their taxable income. For the 2022 tax year, this percentage rises to 100%.

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 2021)
  • Montana (with a different method for determining the taxable amount), and
  • New Mexico (with an $8,000 exemption for those 65 and older).

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

States That 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 do not 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.

United States 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.

Learn more about federal taxation of disability benefits.

Updated January 13, 2022

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