I receive a pension as a former state employee which is NOT taxable to my state---(do not have to file a State return).. but IS taxable to the Feds... This year I also started getting social security disability.. I know that 1/2 of those disability payments is subject to FEDERAL TAX because my retirement income is over $25,000... HOWEVER, since I actually have NO TAXABLE INCOME from my state, would I therefore have to pay taxes on ANY of the social security money to my State as the retirement money I receive is NOT TAXABLE to my state? State is NY vp... The only reason my Social security IS taxable to the FEDS is that I have OTHER TAXABLE INCOME which is over $25,000... Social security law says if you have combined income, interest, etc of over $25,000, then in MY case, 1/2 of the Social security benefits is taxable to the FEDERAL IRS... However, for New york State purposes, I do not FILE a return because i HAVE no taxable income EXCEPT the social security which, if my INCOME is not taxable to NY, why then would my SSD be taxable----as my total taxable NY income is 0???