Is Social Security Taxable in Connecticut and North Carolina?

How the IRS decides how much is taxable

The IRS compares a figure often called "combined income" to a base amount for your filing status. Combined income is:

• one-half of your Social Security benefits (box 5 of Form SSA-1099), plus
• all your other income, including tax-exempt interest.

Two points that often surprise people:

• "Up to" 85% is a cap, not a tax rate. At most 85% of your benefits is added to your taxable income. That amount is then taxed at your normal rate.
• Other income pulls in more benefits. IRA withdrawals, required minimum distributions, pensions, wages, interest and capital gains all raise combined income, which can make more of your benefits taxable.

Social Security benefits here means monthly retirement, survivor and disability benefits. The IRS says Supplemental Security Income (SSI) isn't taxable. The exact math is on Worksheet 1 in IRS Publication 915 and in the Form 1040 instructions.

Worked examples

Examples are simplified. They assume all other income is fully taxable, with no adjustments, exclusions or tax-exempt interest. Your own return may differ.

Connecticut: the income limits and the 25% cap

Connecticut starts with the federally taxable amount and then lets you subtract some or all of it on Form CT-1040, Line 41 (the Social Security benefit adjustment).

Under the limit: subtract all of your federally taxable benefits. Connecticut taxes none of them.

At or over the limit: use the Social Security Benefit Adjustment Worksheet in the CT-1040 instructions. In short, Connecticut taxes the smaller of:

• your federally taxable benefits, or
• 25% of the smaller of (a) your total benefits or (b) the amount by which your income exceeds the federal base amount (from your federal Social Security benefits worksheet).

So at higher incomes, no more than 25% of your benefits is taxed by Connecticut, even when 85% is taxed federally.

North Carolina: benefits aren't taxed

NCDOR's instructions say Social Security and railroad retirement benefits aren't subject to North Carolina income tax. If any of your benefits were included in federal adjusted gross income, you deduct that amount on Form D-400 Schedule S, Line 19 ("Taxable Portion of Social Security and Railroad Retirement Benefits").

Other retirement income is a different story. Pensions, IRA withdrawals and required minimum distributions are generally taxed in North Carolina at the flat individual rate: 4.25% for 2025 and 3.99% for tax years after 2025. Some government retirees can deduct certain benefits under the Bailey settlement (Schedule S, Line 20).

The $6,000 senior deduction is separate

The 2025 tax law added an extra deduction for people 65 and older for tax years 2025 through 2028:

• $6,000 per eligible person, or $12,000 for a married couple if both qualify.
• It's in addition to the regular extra standard deduction for seniors, and you can take it whether you itemize or not.
• It phases out above modified adjusted gross income of $75,000 ($150,000 for joint filers). The Congressional Research Service describes the phase-out as 6% of the income over those amounts.

It doesn't change how much of your Social Security is taxable. It lowers your federal taxable income instead, so for many retirees it reduces or wipes out the federal tax on their benefits. That's why you may hear it called "no tax on Social Security," even though the benefit formula itself didn't change.

Withholding and estimated payments

Social Security doesn't withhold federal income tax unless you ask. You can request withholding by giving Form W-4V to the Social Security Administration. Otherwise, you may need to have more withheld from other income or make estimated tax payments. See our CT estimated tax payments guide and tax deadlines.

For reference, Social Security benefits rose by a 2.8% cost-of-living adjustment for 2026, according to SSA.