MONEY MATTERS: 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 see a reduction in their Social Security checks this month due to a tax increase in nine US states. These states are set to raise the amount of tax deducted from Social Security benefits starting in September, potentially resulting in smaller monthly payments for affected residents.
Affected States
The nine states implementing the tax hike are:
- Colorado
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
- West Virginia
In contrast, the remaining 41 states do not tax Social Security benefits, according to Investopedia.
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Impact of the Tax Hike
The amount of Social Security benefits subject to tax is influenced by overall income. Consequently, the effect of this new tax will vary based on individual income levels and state regulations. Generally, higher Social Security benefits may lead to higher taxes.
State Exemptions and Expansions
Some states, including Colorado, are also increasing their Social Security tax exemptions for qualifying seniors. This could offset some of the impacts of the tax hike for certain individuals, as noted by AARP.
Social Security Payments Overview
Approximately 68 million Americans receive Social Security payments each month, totaling around $1.5 trillion annually. About 40% of these recipients are subject to federal or state taxes on their benefits due to having additional significant income.
The average monthly Social Security retirement check is $1,918, with some payments reaching as high as $4,873. Nearly 90% of people aged 65 and older receive Social Security benefits, which typically represent about 30% of their income.
According to the Social Security Administration (SSA), individuals who retire at the official retirement age this year can expect a maximum benefit of $3,822 per month. However, if one retires at age 70, the maximum benefit could be $4,873. Conversely, retiring at age 62 could result in a maximum benefit of $2,710.
Scam Alert
In related news, a woman recently reported a scam involving a fraudulent email claiming that her Social Security number was linked to criminal activities. Joyce House received an email asserting that her number was involved in drug trafficking, but she recognized the scam and avoided falling victim. She shared her experience to alert others about similar scams.
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“I’m hoping if [the scammers] reached out to anybody else that they’ll not fall for this,” House said.
