BIG UPDATE: People in 9 states to get skimpier Social Security checks from today – map shows where you could get up to $200 less
According to THE SUN, Some Americans may notice a reduction in their Social Security checks this month due to new tax increases in nine U.S. states. Residents in these states will face higher taxes on their Social Security benefits starting in September, which could lead to smaller monthly payments.
The states affected by this tax hike are: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. In contrast, the remaining 41 states do not impose income taxes on Social Security benefits, as reported by Investopedia.
The impact of these tax increases will vary depending on individual circumstances and the state in which one resides. Generally, those receiving larger Social Security payments may experience higher taxes.
While some states are increasing taxes, others are expanding exemptions for qualifying seniors; Colorado is among those making changes, according to AARP.
The Scope of Social Security Payments
Currently, approximately 68 million Americans receive Social Security benefits, costing the government around $1.5 trillion annually. Notably, about 40% of recipients must pay federal or state taxes on their benefits, often due to additional significant income sources.
The new taxes will be deducted when individuals file their federal tax returns.
According to the Social Security Administration (SSA), the average retirement benefit is $1,918 per month, with payments reaching as high as $4,873 for those who qualify. Nearly 90% of individuals aged 65 and older rely on Social Security, which typically accounts for around 30% of their income.
Maximizing Benefits
For those retiring this year, the maximum monthly benefit for retiring at the official retirement age is $3,822. However, the longer one delays retirement, the more they can receive; for instance, retiring at age 70 in 2024 could yield a maximum benefit of $4,873, while retiring at age 62 would result in a maximum benefit of $2,710.
Payments are disbursed throughout the month due to the high volume of recipients.
Scam Awareness
In related news, a woman recently reported a scam targeting Social Security recipients. Joyce House received an email falsely claiming her Social Security number was linked to drug trafficking and other criminal activities. Recognizing the email as a scam, she shared her experience to help others avoid similar scams.
“I’m hoping if [the scammers] reached out to anybody else that they’ll not fall for this,” House stated.
