5 States That Tax Social Security in 2024

4. Minnesota

Insider Monkey Score: 12    

Cost of Living Index: 94.1    

Tax Friendliness: Not Tax Friendly

While Minnesota still taxes Social Security benefits in 2024, a legislation was passed last year that allows retirees to keep more of their benefits than in the past. From tax year 2023, seniors having a taxable income up to $78,000, or $100,000 for a couple, are exempt from paying state taxes on their benefits. Most other forms of retirement income are also taxed in the state, with certain deductions and subtractions available. Property taxes in the state are close to the national average, while sales tax rate is high. For these reasons, Minnesota is considered as an unfriendly state for retirees in terms of taxes. However, the cost of living in this state is 5.9% lower than the national average.