Social Security benefits count as income for tax purposes, but not all of your benefits are taxable, and many people pay no federal tax on them at all
Whether you owe federal income tax on your Social Security benefits depends on your combined income — a specific calculation that includes your wages, pensions, interest, dividends, and a portion of your Social Security. The IRS uses a formula with two income thresholds. If your combined income falls below the first threshold, you owe no federal tax on your benefits. If it exceeds the second threshold, up to 85 percent of your benefits may be taxable. Most people fall somewhere in between, meaning some but not all of their benefits are taxable.
State taxes are separate. Some states do not tax Social Security at all. Others tax it only if your income exceeds certain levels, and a few tax it the same way the federal government does. You will need to check your state's rules separately.
Key Takeaways
- Combined income, not just Social Security, determines whether your benefits are taxable — combined income includes half of your annual Social Security benefits plus all other income sources.
- If your combined income is below $25,000 (single) or $32,000 (married filing jointly), you owe no federal tax on your benefits.
- If your combined income exceeds $34,000 (single) or $44,000 (married filing jointly), up to 85 percent of your benefits become taxable.
- You can request that the Social Security Administration withhold federal taxes directly from your benefit payments to avoid a tax bill at filing time.
- State tax treatment of Social Security varies widely — some states exempt it entirely, while others apply their own income tax rules.
How the IRS calculates combined income
The IRS does not simply add your Social Security to your other income. Instead, it uses a formula called combined income, which is calculated this way: take your adjusted gross income (wages, pensions, interest, dividends, and other income sources), add any tax-exempt interest you earned, then add half of your annual Social Security benefits. That total is your combined income for tax purposes.
This matters because you can have a high Social Security benefit but a low combined income if you have little other income. Conversely, you might have a modest benefit but a high combined income if you have significant pension or investment income, which would make your benefits taxable even though the benefit itself is small.
The two federal tax thresholds
The IRS uses two income thresholds to determine how much of your benefit is taxable. These thresholds have not changed since 1984 and do not adjust for inflation.
| Filing Status | First Threshold | Second Threshold |
|---|---|---|
| Single | $25,000 | $34,000 |
| Married filing jointly | $32,000 | $44,000 |
| Married filing separately | $0 | $0 |
If your combined income is at or below the first threshold, none of your Social Security is taxable. If your combined income is between the first and second threshold, up to 50 percent of your benefits may be taxable. If your combined income exceeds the second threshold, up to 85 percent of your benefits may be taxable. The exact amount depends on how far above the threshold you are.
Married couples filing separately face a much stricter rule: if you file separately and lived with your spouse at any time during the year, all of your Social Security is potentially taxable, regardless of income.
What counts toward combined income
Combined income includes almost all money you receive, with a few exceptions. Wages, self-employment income, pensions, annuities, rental income, capital gains, and interest all count. Distributions from retirement accounts like IRAs and 401(k)s count, whether they are required distributions or voluntary withdrawals.
Tax-exempt interest — such as interest from municipal bonds — also counts toward combined income for this calculation, even though it is not taxable income itself. This is one of the few places where tax-exempt income affects your tax bill.
Some income does not count: Supplemental Security Income (SSI), Medicaid, food stamps, and housing assistance do not count toward combined income. Neither do gifts or inheritances, or the return of your own principal from investments.
How to request tax withholding on your benefits
If you know your benefits will be taxable and you want to avoid a tax bill when you file, you can ask the Social Security Administration to withhold federal income tax directly from your monthly payment. You do this by completing Form W-4V (Voluntary Withholding Request) and submitting it to your local Social Security office, by mail, or online through your my Social Security account.
On the form, you choose a withholding rate: 7 percent, 10 percent, 15 percent, or 25 percent of your monthly benefit. The amount withheld is sent to the IRS and credited toward your annual tax bill. This does not change how much tax you owe — it just spreads the payment across the year instead of requiring a lump sum at tax time.
You can change or stop withholding at any time by submitting a new Form W-4V. If you stop withholding and later realize you need it, you can restart it in the following month.
State tax treatment of Social Security
Thirteen states do not tax Social Security benefits at all: Alaska, Florida, Illinois, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nevada, Pennsylvania, and Tennessee. If you live in one of these states, you owe no state income tax on your benefits regardless of your income.
The remaining states either tax Social Security using their own rules or follow the federal thresholds. Some states use income thresholds similar to the federal ones but set them higher or lower. Others tax Social Security as regular income once your total income exceeds a certain level. A few states tax it only if you are over a certain age. You will need to check your state's tax department website or speak with a tax preparer familiar with your state's rules.
What to do when you file your tax return
When you file your federal tax return, you report your Social Security benefits on Form 1040 (the main tax form) and Schedule 1 (additional income). The IRS worksheet in the instructions to Form 1040 walks you through the calculation to determine how much of your benefit is taxable. If you use tax preparation software, it will perform this calculation for you once you enter your benefit amount.
You will receive a Form SSA-1099 from Social Security by January 31 each year showing the total benefits you received in the prior year. This is the amount you report on your tax return. Keep a copy for your records.
If you had taxes withheld from your benefits, that withholding appears on your Form SSA-1099 as well, and it is credited toward your tax bill just like withholding from wages.
Frequently Asked Questions
Do I have to file a tax return if my only income is Social Security?
Not necessarily. If Social Security is your only income and your combined income is below the first threshold ($25,000 for single filers, $32,000 for married filing jointly), you owe no federal tax and are not required to file. However, if you had taxes withheld from your benefits, you may want to file to get a refund of that withholding.
Can I reduce my combined income to avoid taxes on my benefits?
Not easily. Combined income includes most sources of money you receive. You cannot avoid it by putting money in a savings account or by not spending your income. If you have control over when you take retirement account distributions, timing those withdrawals might help in some cases, but this requires careful planning with a tax professional.
What if I worked while receiving Social Security before full retirement age?
Earnings from work reduce your benefit payment itself — Social Security withholds $1 in benefits for every $2 you earn above an annual limit (the limit changes yearly). This is separate from income tax. Once you reach full retirement age, earnings no longer reduce your benefit, but they do count toward combined income for tax purposes.
Does my spouse's income affect whether my benefits are taxable?
Only if you file jointly. If you file a joint return, you combine both spouses' incomes to calculate combined income. If you file separately, each spouse's benefits are calculated based on their own income only — but married couples filing separately face the stricter rule mentioned earlier.
If I move to a state with no Social Security tax, do I owe back taxes to my old state?
No. Your state tax obligation is based on where you live on December 31 of the tax year. Once you move to a state that does not tax Social Security, you owe no state tax on your benefits going forward. You do not owe taxes to your former state for benefits you received while living there if that state taxed them — that was your obligation at the time.