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Market Watch
The question, “Does my state tax Social Security benefits?” may be simple enough, but the answer includes a lot of nuance.
Many states have unique and specific provisions regarding the taxation of Social Security benefits, which can be broken into a few broad categories.
Thirty-seven states and Washington, D.C., either have no income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming) or do not include Social Security benefits in their calculation for taxable income (Alabama, Arizona, Arkansas, California, Delaware, Washington, D.C., Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia and Wisconsin.)
West Virginia passed a law in 2019 to begin phasing out taxes on Social Security. Beginning in tax year 2020, the state exempts 35% of benefits. In 2021, that amount increases to 65%, and in 2022, the benefits will be completely exempt.
By Janelle Cammenga | 4 Feb 2021
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