Retirees in 9 States Face Potential Social Security Tax Reductions

State and federal tax rules could significantly impact the Social Security benefits of retirees, particularly in nine specific states.

Social Security benefits are a major source of income for many retirees, with some relying on it for over 90% of their income.
Federal taxation on Social Security is determined by combined income, which includes half of Social Security benefits, adjusted gross income, and nontaxable interest income.
Nine states—Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia—still tax Social Security benefits, though some are phasing out these taxes.
Working while collecting Social Security before reaching full retirement age can result in benefit reductions if earnings exceed certain thresholds.
Spousal benefits can be affected if the primary beneficiary suspends or withdraws their Social Security application, potentially reducing the household's total benefits.