Fifty-six percent of households receiving Social Security checks pay federal tax on those benefits, according to a nationwide survey by advocacy group The Senior Citizens League. "The tax on Social Security income takes new retirees by surprise," said TSCL chairman Ed Cates in a statement.
But there's another surprise: You might not be paying just federal taxes on that retirement income, if you're "unlucky" enough to live in one of the 13 states that also levy their own taxes on Social Security checks. Six of the states tax benefits in the same way the federal government does, while the other seven "determine benefit exemptions based on other factors, such as income or age or as a certain percentage of Social Security income," according to tax policy research organization the Tax Foundation.
"This is one retirement expense that must be carefully planned for," warned Cates of TSCL. CNBC.com takes an alphabetical look at the baker's dozen of states that take a second bite out of your retirement pay.
— By CNBC's Kenneth Kiesnoski
Posted 2 February 2016