Social Security: 6 States That Heavily Tax Benefits
As a retiree, there are few things as frustrating as the fact that your Social Security benefits are potentially subject to federal income taxes. Weren't previously paid taxes what financed them in the first place?
To make matters worse, a handful of states also require retirees to remit a portion of their monthly benefits to the public coffers. But while some states are more lenient in this regard than others, there are six that stand out from the pack on the opposite end of the spectrum.
These states -- Minnesota, Nebraska, North Dakota, Rhode Island, Vermont, and West Virginia -- apply the same standard for taxation as that used at the federal level. As a result, many retirees in these states face the dismal prospect of having at least some of their benefits reabsorbed into the system.
Expanding on this in the following video, Motley Fool contributor John Maxfield breaks down the 50 states according to how they treat Social Security payments for purposes of income taxes.
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