Social Security recipients received the largest cost-of-living adjustment in four decades in 2023. But because those payments boosted their incomes, many of those beneficiaries could take a financial hit this tax season.
Retirees may know that the federal government will tax their Social Security, which can include monthly retirement, survivor and disability benefits if their total income exceeds certain amounts. But fewer may realize that some states also will levy a tax.
Only about a dozen states are taxing Social Security benefits this year, and that number will drop further next year. While each state has different rules on what or how they will tax your Social Security money, age and income usually determine if you pay.