Taxes in Retirement: How All 50 States Tax Retirees

LTC Eugene Chu
..."Are Social Security benefits taxable? You can bet your bottom dollar they are – at least by the federal government, which taxes up to 85% of your benefits, depending on your income. But what about state taxes on Social Security? Unfortunately, a dozen states can tack on additional taxes of their own.

States have different ways of taxing Social Security, too. It can be age-based, such as in Colorado where people under 65 may owe taxes on Social Security benefits but older people generally don't. But other states tax Social Security benefits only if income exceeds a specified threshold amount. For example, Missouri taxes Social Security benefits only if your income tops $85,000, or $100,000 for married couples. Then there's Utah, which includes Social Security benefits in taxable income, but allows a tax credit for a portion of the benefits subject to tax. Other states have different methods of taxing your Social Security check.

Also remember that a tax on Social Security doesn't necessarily mean a state is unsuitable for retirement. Colorado, one of the states that taxes at least some Social Security benefits, actually ranks as one of the 10 most tax-friendly state for retirees. That's why it's best to weigh all state taxes when researching the best places to retire. And our list of the 12 states that tax Social Security benefits will help you do just that. For each state, we provide information on the state's sales tax, property tax, and any death taxes. We've also included a link to the state's page in our State-by-State Guide to Taxes on Retirees(opens in new tab), where you can find additional information about taxes on seniors."...

Michigan here and our taxes are horrible.... there was a proposal in the state legislator the beginning of this year to reduce the gas tax as gas prices soared.... but the Governor shot it down.... well folks must have been happy with her decision as she won her seat again... thinking S.D. might be a nice place to move, I hear that they are a rising star amongst states in the U.S.