Yes, your Social Security benefits are taxable (at least in these 13 states). However, remember that not all of these 13 states tax your Social Security benefits in exactly the same way and even if you do live in one of these states, taxes on Social Security shouldn’t be the only factor in deciding where you want to spend your golden years.
Read on to discover the states that tax your Social Security benefits.
State Taxes on Social Security: Up to $20,000 of Social Security benefits can be excluded, along with other retirement income, but only for people who are younger than 65. Those who are older can exclude Social Security benefits and other retirement income up to $24,000. Also, Social Security income not taxed by the federal government is not added back to adjusted gross income for state income tax purposes.
Sales Tax: 2.9% state levy. Localities can add as much as 8.30%, and the average combined rate is 7.52%, according to the Tax Foundation.
Income Tax Range: All Colorado residents who have federal taxable income pay a flat rate of 4.63%. Taxpayers are also subject to a state alternative minimum tax.
Property Taxes: The median property tax on Colorado’s median home value of $264,600 is $1,516.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.