Taxing Social Security Benefits
The 14 states that tax Social Security benefits collect almost $1 billion a year from seniors.
A new study released Tuesday by AARP shows the federal government collected $45.9 billion in taxes on Social Security income in 2011. Only a handful of states tax those retirement benefits, and AARP estimated the state take at $948 million a year.
The five highest state tax collections on Social Security benefits, according to AARP research, are:
- Minnesota $245 million
- New Mexico $92 million
- Utah $89 million
- Nebraska $82 million
- Kansas $74 million
About 1 out of 6 Americans—57 million people—received $774.6 billion in Social Security benefits in 2012. The AARP research also estimated nationwide economic output from seniors spending their Social Security checks at $1.4 trillion and 9.2 million jobs.
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