Cashing a Social Security check as the only source of income in the United States can be a bit of a challenge financially. Having a check every new month for up to $4,555 can be nice, but sometimes it may not work out the way we want it to. Especially if we have to pay some of that money not only in federal but also state taxes.
Luckily, most states do not collect taxes on Social Security checks. However, some of the states do take part of the benefit for taxes. Therefore, if we live in one of those states where state taxes do have to be paid on the retirement check we need to watch out.
If we do not pay our taxes on time we could have some financial problems in the future. This is important, as citizens who do not pay their taxes could get in trouble with the law. So check carefully to see if your state requires you to pay part of your Social Security check in taxes to meet the state’s financial obligation.
States that collect taxes from your Social Security check
These states we are going to look at below collect taxes from the Social Security check. While this is the general rule, some retirees may have exceptions to this. So if you’re waiting to collect your Social Security check and you’re getting less money than you should, you may be living in one of these states.
Pay attention and see if you live in one of the states on the list:
- Colorado
- Connecticut
- Kansas
- Minnesota
- Missouri
- Montana
- Nebraska
- New Mexico
- Rhode Island
- Utah
- Vermont
These are the states that collect some of our retirement check in taxes. So don’t forget to report your Social Security benefit when you file your Tax Return, otherwise you could have problems in the future. The rest of the states will not charge taxes, so if you live in a state that is not on the list, you will only have to pay federal taxes and you can forget about state taxes.
What is the maximum Social Security payment in 2023?
Whether we pay taxes or not, the maximum Social Security payment in 2023 is the same for everyone in the United States. If we collect the maximum payment it means we will receive a check each month for $4,555. This is a very large payment when you consider that the average is barely $1650 per month.
Still, remember that it is not advisable to live on just the Social Security payment as a source of income. It is always a good idea to add other types of income such as extra work, investments or sales of things you don’t need.
It is also possible to get an extra check each month from Supplemental Security Income. But this payment is for the neediest citizens. Therefore, if we are receiving a monthly check of $4,555 or similar we will not be able to apply for Supplemental Security Income.