Whether your Social Security is taxed depends on your other income

Social Security benefits are sometimes taxed and sometimes not — it depends on how much other income you have. The Social Security Administration does not tax your benefits themselves, but the IRS may tax a portion of them if your total income crosses certain thresholds. Those thresholds are the same whether you are 62 or 85, and they have not changed since 1984.

The tax applies only to the amount of benefits above a calculation based on your other income. Most people who receive Social Security do not pay tax on it. Those who do typically owe tax on 50 percent or 85 percent of their benefits, not the full amount.

Key Takeaways

  • You will not owe tax on Social Security unless your combined income (wages, interest, dividends, and half your Social Security benefits) exceeds $25,000 for a single filer or $32,000 for a married couple filing jointly.
  • If you do owe tax, you pay it only on the portion of benefits above the threshold, not on all your benefits.
  • The IRS uses a formula that taxes either 50 percent or 85 percent of your benefits, depending on how far your income exceeds the threshold.
  • You can have taxes withheld from your Social Security check, or you can pay estimated taxes quarterly — the choice is yours.
  • Your state may also tax Social Security benefits, though most states do not.

The income thresholds that determine whether you owe tax

The IRS looks at what it calls your combined income: your wages, interest, dividends, and half of your Social Security benefits added together. If that number stays below a certain point, you owe no federal tax on your benefits at all.

For a single filer, the threshold is $25,000. For a married couple filing jointly, it is $32,000. For a married person filing separately, it is $0 — meaning any Social Security at all may be taxable if you file that way. These numbers have remained the same since 1984 and do not adjust for inflation.

If your combined income exceeds the threshold, you do not owe tax on all your benefits. Instead, the IRS calculates how much of your benefits are taxable using a two-tier formula. The first tier taxes up to 50 percent of your benefits. The second tier, which kicks in at higher income levels, can tax up to 85 percent of your benefits.

How the IRS calculates the taxable portion

The calculation works in two steps. First, the IRS adds up the amount by which your combined income exceeds the threshold. Then it applies the formula.

If your combined income is between the threshold and $9,000 above it (for single filers; $12,000 for married filing jointly), you may owe tax on up to 50 percent of your benefits. Specifically, the IRS taxes the lesser of: half your benefits, or half the amount your combined income exceeds the threshold.

If your combined income exceeds the second threshold — $34,500 for single filers or $44,000 for married filing jointly — the calculation becomes more complex. At that point, up to 85 percent of your benefits may be taxable. The exact amount depends on how far above the second threshold you are and what the 50 percent calculation produced.

Because the formula is intricate, the IRS provides a worksheet in the instructions to Form 1040 and Form 1040-SR. Many people use tax software or a tax preparer to work through it.

How to handle tax withholding on your benefits

If you expect to owe tax on your Social Security, you have two options: have taxes withheld from your monthly check, or pay estimated taxes on your own schedule.

To request withholding, you fill out Form W-4V and send it to your local Social Security office or mail it to the address on the form. You can choose to have 7 percent, 10 percent, 15 percent, or 20 percent of your benefit withheld each month. The Social Security Administration will then send that amount to the IRS on your behalf.

If you prefer not to have taxes withheld, you can pay estimated taxes quarterly using Form 1040-ES. This route requires you to calculate what you owe and send a check to the IRS four times a year — on April 15, June 15, September 15, and January 15. Many people find withholding simpler because it happens automatically.

State taxes on Social Security benefits

Most states do not tax Social Security benefits at all. However, a small number do: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont currently tax some or all of Social Security income.

The rules vary by state. Some states use the same federal thresholds; others have their own. Some states tax only benefits received by people below a certain age or income level. If you live in one of these states and receive Social Security, check your state tax return instructions or contact your state tax authority to see whether you owe state tax on your benefits.

What counts as income for the combined income calculation

Combined income includes wages from work, self-employment income, interest, dividends, capital gains, rental income, and distributions from retirement accounts. It also includes half of your Social Security benefits — that is the key piece that often pushes people over the threshold.

Some types of income do not count: Supplemental Security Income (SSI) does not count, nor do certain tax-exempt interest payments (such as interest from municipal bonds). Veterans benefits also do not count toward combined income. If you are unsure whether a particular income source counts, the IRS worksheet in Form 1040 instructions walks through each type.

What happens if you did not withhold enough tax

If you did not have taxes withheld and you owe more than you paid in estimated taxes, you will owe the difference when you file your return. You may also owe a penalty for underpayment of estimated tax, though the IRS waives this penalty in certain situations — for example, if your income was uneven throughout the year or if you had no tax liability the prior year.

If you withheld too much, you will receive a refund when you file. Many people intentionally have extra tax withheld from their Social Security so they do not have to worry about a bill at tax time.

Frequently Asked Questions

Do I have to file a tax return if I only receive Social Security?

Not necessarily. If Social Security is your only income and it is below the filing threshold for your age and filing status, you do not have to file. However, if you had taxes withheld, you may want to file to get a refund. The IRS website has a filing requirement tool to help you determine whether you must file.

Can I reduce my taxable Social Security by delaying when I claim?

Delaying your claim increases your monthly benefit amount, but it does not change the tax calculation itself. However, if you have other income you can control — such as retirement account withdrawals — timing those withdrawals may help you stay below the income threshold in some years.

What if I work and receive Social Security at the same time?

Your wages count as income in the combined income calculation. If you are under full retirement age and earn above a certain amount, Social Security also reduces your monthly benefit — that is a separate rule from taxation. Both your wages and half your benefits go into the combined income calculation for tax purposes.

Does my spouse's income affect whether my Social Security is taxed?

Only if you file jointly. If you file jointly, you combine both spouses' incomes and half of both spouses' benefits to calculate combined income. If you file separately, each spouse's Social Security is calculated based on that person's income alone.

If I owe tax on my Social Security, do I pay it to Social Security or the IRS?

You pay it to the IRS like any other federal income tax — either through withholding from your benefit check or through estimated tax payments. Social Security does not collect the tax; it only reports your benefits to the IRS.