Whether you pay taxes on Social Security depends on your other income

You may owe federal income tax on your Social Security benefits if your combined income exceeds a certain threshold. Combined income means your adjusted gross income plus nontaxable interest plus half your Social Security benefits. The IRS uses two thresholds: if you file as single and your combined income is over $25,000, or if you file as married filing jointly and it's over $32,000, some of your benefits become taxable. If your combined income exceeds $34,000 (single) or $44,000 (married filing jointly), up to 85 percent of your benefits may be taxable.

These thresholds have not changed since 1984, so they affect more people now than when they were set. Whether you actually owe tax also depends on your tax bracket and the total amount of benefits you receive. Some people with combined income just above the threshold owe tax on only a small portion of their benefits, while others owe tax on a much larger share.

State taxes are separate from federal taxes. Some states do not tax Social Security at all, while others tax it under the same rules as the federal government or have their own thresholds. Check your state's tax authority website or your state income tax form to see how your state treats Social Security income.

Key Takeaways

  • You calculate whether your benefits are taxable by adding your adjusted gross income, nontaxable interest, and half your Social Security benefits to find your combined income.
  • If your combined income exceeds $25,000 (single) or $32,000 (married filing jointly), you may owe federal tax on up to 50 percent of your benefits; above $34,000 or $44,000, up to 85 percent may be taxable.
  • The IRS sends you a Form SSA-1099 each January showing the benefits you received in the prior year, which you use to complete your tax return.
  • State tax treatment of Social Security varies by state, and some states do not tax benefits at all.
  • You can request that the Social Security Administration withhold federal income tax from your monthly benefit payment to avoid owing a large amount at tax time.

How to calculate your combined income

Start with your adjusted gross income (AGI), which is the income figure on your tax return before you claim the standard deduction or itemized deductions. This includes wages, self-employment income, pensions, interest, dividends, and capital gains. If you have a pension from work not covered by Social Security, you may also have to include a portion of that pension.

Add any nontaxable interest you received during the year. This is interest from municipal bonds or other sources that do not show up on your regular income tax return. Then add half of the total Social Security benefits you received in the year. The result is your combined income, which you compare to the IRS thresholds.

If you are married filing jointly, you combine your income and your spouse's income, including both of your Social Security benefits. If you are married filing separately, the threshold is $0, meaning any combined income at all may trigger taxation of your benefits.

How much of your benefits becomes taxable

The IRS uses a two-tier system to determine how much of your benefits you owe tax on. If your combined income is between the first and second threshold, you may owe tax on up to 50 percent of your benefits. If your combined income exceeds the second threshold, you may owe tax on up to 85 percent of your benefits.

The exact amount depends on a formula the IRS publishes each year. You do not calculate this yourself; instead, you report your Social Security income on your tax return (using the Form SSA-1099 the Social Security Administration sends you), and your tax software or tax preparer calculates the taxable portion. The IRS Worksheet for Social Security Benefits in the Form 1040 instructions walks through the calculation step by step.

In practice, most people who owe tax on their benefits owe tax on somewhere between 0 and 85 percent of what they received, depending on how far their combined income exceeds the threshold.

The Form SSA-1099 and reporting on your tax return

Each January, the Social Security Administration mails you a Form SSA-1099 showing the total benefits you received in the prior calendar year. This form lists the amount in Box 1 (benefits paid) and Box 2 (benefits repaid, if any). You use the amount in Box 1 when you calculate your combined income and when you complete your tax return.

You report your Social Security benefits on Form 1040, lines 5a and 5b. Line 5a is where you enter the total from Box 1 of your SSA-1099. Line 5b is where you enter the taxable portion, which you calculate using the worksheet in the Form 1040 instructions or with tax software. If no part of your benefits is taxable, you still report the total on line 5a but enter zero on line 5b.

Keep your SSA-1099 with your tax records. If you file electronically, you do not mail the form, but you should keep it for your records in case the IRS asks questions later.

Withholding taxes from your Social Security payment

If you expect to owe federal income tax on your benefits, you can ask the Social Security Administration to withhold money from your monthly payment. This works the same way as tax withholding from a paycheck: the money is sent directly to the IRS, and you receive a smaller monthly benefit.

To request withholding, fill out Form W-4V (Voluntary Withholding Request) and mail it to your local Social Security office, or bring it in person. You can choose to have 10 percent, 15 percent, 25 percent, or 50 percent of your benefit withheld, or you can specify a dollar amount. The withholding starts the month after Social Security receives your form.

Withholding does not change how much tax you owe; it just spreads the payment across the year instead of requiring you to pay a lump sum when you file your return. If you withhold too much, you will receive a refund when you file. If you withhold too little, you will owe when you file.

What counts as income for the combined income calculation

Earned income (wages and self-employment income) counts toward your combined income. So does income from pensions, annuities, interest, dividends, capital gains, and rental income. If you have income from a job while you are receiving Social Security, all of that job income counts.

Some types of income do not count. Supplemental Security Income (SSI) does not count. Veterans benefits do not count. Gifts and inheritances do not count. Proceeds from selling your home do not count (though any gain on the sale may count as capital gains income). Refundable tax credits like the Earned Income Tax Credit do not count toward combined income.

If you are still working and your employer offers a 401(k) or similar retirement plan, contributions you make to that plan reduce your adjusted gross income, which lowers your combined income and may reduce the amount of your benefits that are taxable.

State income tax on Social Security

Thirteen states tax Social Security benefits under rules similar to the federal rules: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Each state has its own income thresholds and rules about what portion of benefits is taxable, so you need to check your state's tax form or website.

The remaining states do not tax Social Security benefits at all. If you live in one of those states, you do not owe state income tax on your benefits, even if you owe federal tax. If you move to a different state after you start receiving benefits, your state tax situation may change.

Some states that do not tax Social Security may still require you to file a state income tax return if you have other income above a certain threshold. Check your state's rules to see whether you need to file.

Frequently Asked Questions

Do I have to file a tax return if my only income is Social Security?

If Social Security is your only income and the amount is below the filing threshold for your age and filing status, you do not have to file a federal return. For 2024, the threshold for a single person age 65 or older is $15,000 in gross income. However, if you had federal income tax withheld from your benefits, you should file a return to claim a refund of that withholding.

Can I reduce my combined income to avoid taxes on my benefits?

You can reduce your adjusted gross income by contributing to a traditional IRA or by making certain other deductions, which lowers your combined income. However, you cannot reduce the amount of Social Security benefits you received. If your combined income is above the threshold, some portion of your benefits will likely be taxable no matter what.

What if I made a mistake on my tax return and reported the wrong amount of Social Security income?

You can file an amended return using Form 1040-X. If you owe additional tax, you should file as soon as you discover the error. If you are due a refund, you have three years from the original due date to file the amended return and claim it.

Does my spouse's Social Security count toward my combined income?

If you file jointly, yes — you combine both your benefits and your spouse's benefits when calculating combined income. If you file separately, each person's benefits count only toward that person's combined income, but the threshold for married filing separately is $0, so any combined income triggers taxation.

Will my Medicare premiums go up if I have to pay taxes on my Social Security?

Your Medicare Part B and Part D premiums are based on your modified adjusted gross income (MAGI) from two years prior, not on whether you owe income tax. If your MAGI is above certain thresholds, your premiums increase. This is separate from income tax, though the two are sometimes related.