Whether your Social Security is taxed depends on your other income

Social Security itself is never taxed by the federal government — the money you receive is not subject to income tax withholding. However, a portion of your benefits may become taxable income if you earn money from other sources. The IRS uses a formula based on your "combined income," which includes wages, interest, dividends, and half of your Social Security benefits.

The tax applies only if your combined income exceeds a threshold. For 2024, those thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. If you stay below these amounts, you owe no federal tax on your Social Security. If you cross them, up to 50 percent or 85 percent of your benefits may be counted as taxable income, depending on how far over the threshold you go.

Some states also tax Social Security benefits, though most do not. Your state's tax rules are separate from federal rules, so you may owe state tax even if you owe nothing to the IRS.

Key Takeaways

  • Social Security benefits are not automatically taxed, but they become taxable income if your combined income (wages plus half your benefits) exceeds $25,000 for single filers or $32,000 for married couples.
  • Combined income is calculated by adding your adjusted gross income, tax-exempt interest, and half your Social Security benefits — not your total benefits.
  • If you are below the threshold, you file taxes normally and report your Social Security on Form 1040, but owe no tax on it.
  • Thirteen states tax Social Security benefits under their own rules, so check your state's Department of Revenue website to see whether you owe state tax.
  • You can request that the Social Security Administration withhold federal income tax from your monthly payment to avoid a large bill at tax time.

How the IRS calculates combined income

The IRS does not tax your full Social Security amount. Instead, it uses a two-step calculation. First, you add up your adjusted gross income (wages, self-employment income, interest, dividends, and certain other sources), then add half of your Social Security benefits. This sum is your "combined income."

If your combined income is below the threshold ($25,000 single, $32,000 married filing jointly), you owe no federal tax on your benefits. If it exceeds the threshold, the IRS taxes the lesser of two amounts: either 50 percent of the excess over the threshold, or 50 percent of your total benefits. For higher combined incomes, an additional 85 percent of benefits above a second threshold ($34,000 single, $44,000 married) may also be taxed.

Example: A single person with $20,000 in wages and $18,000 in Social Security has a combined income of $20,000 + $9,000 = $29,000. This exceeds the $25,000 threshold by $4,000. The taxable portion is the lesser of $2,000 (50 percent of the $4,000 excess) or $9,000 (50 percent of total benefits). In this case, $2,000 of the Social Security is taxable income.

The two tax brackets for Social Security

The IRS applies two separate thresholds, which means your tax can increase in two stages as your income rises. The first threshold determines whether any of your benefits are taxed at all. The second threshold, higher than the first, determines whether an additional portion becomes taxable.

For single filers, the first threshold is $25,000 and the second is $34,000. For married couples filing jointly, they are $32,000 and $44,000. For married couples filing separately, both thresholds are $0, meaning nearly all benefits are taxable if you file separately.

Between the first and second threshold, up to 50 percent of your benefits can be taxed. Above the second threshold, up to an additional 35 percent can be taxed, for a combined maximum of 85 percent of your total benefits. You will never pay tax on more than 85 percent of what you receive.

Requesting tax withholding from your Social Security check

If you know your benefits will be taxable, you can ask Social Security to withhold federal income tax from your monthly payment. This prevents a large tax bill when you file your return. You do this by completing Form W-4V and submitting it to your local Social Security office or mailing it to the address on the form.

On Form W-4V, you choose a withholding rate: 7 percent, 10 percent, 12 percent, or 22 percent of your monthly benefit. Social Security will hold that amount each month and send it to the IRS on your behalf. You can change your withholding rate at any time by submitting a new form.

Withholding is optional. If you do not request it, you are responsible for paying the tax when you file your return, either through a lump-sum payment or by setting up a payment plan with the IRS.

State taxes on Social Security benefits

Thirteen states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Each state uses its own income thresholds and tax rates, which differ from federal rules.

Some states exempt a portion of benefits based on age or income level. For example, Missouri taxes benefits only for people with incomes above certain limits. Colorado allows a deduction for people over 55. You will need to check your state's Department of Revenue website or contact them directly to learn your state's specific rules.

If your state taxes Social Security, you will report your benefits on your state tax return separately from your federal return. The amount you owe state tax on may be different from the amount you owe federal tax on.

Reporting Social Security on your tax return

You report your Social Security benefits on Form 1040 (the main federal income tax form) using Schedule 1 if any portion is taxable. The Social Security Administration sends you a Form SSA-1099 each January showing the total benefits you received in the previous year. Use this amount when you file.

If none of your benefits are taxable because your combined income is below the threshold, you still report the benefits on your return — you simply do not owe tax on them. Some people with very low income may not need to file a return at all, but it is worth filing anyway because you may be due a refund or other credits.

If you received benefits for only part of the year — for example, if you started collecting in June — your Form SSA-1099 will show only the months you received payments. Use that exact amount, not an estimate of what a full year would have been.

What counts toward combined income

Combined income includes more than just wages. It includes self-employment income, interest from savings accounts and bonds, dividends from stocks, capital gains from selling investments, rental income, and income from a business or farm. It also includes tax-exempt interest from municipal bonds, which is unusual because that interest is not taxable on its own but counts toward the Social Security threshold.

Combined income does not include certain items: Supplemental Security Income (SSI), veterans' benefits, workers' compensation, or nontaxable portions of pensions. If you receive a Roth IRA distribution, only the taxable portion counts. If you have a traditional IRA and take a distribution, the full distribution counts, even if you roll it over to another IRA within 60 days.

The half of your Social Security benefits that counts toward combined income is added regardless of whether those benefits are actually taxable. This is why someone with very little other income can still have a combined income that exceeds the threshold.

Frequently Asked Questions

Do I have to file taxes if my only income is Social Security?

Not necessarily. If Social Security is your only income and your combined income is below the threshold, you have no tax filing requirement. However, filing may benefit you if you are due a refund or may have access to for credits like the Earned Income Tax Credit or Child Tax Credit.

What if I work part-time and collect Social Security at the same time?

Your wages count toward combined income, which may push you over the threshold and make your benefits taxable. 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. Contact Social Security to learn the current earnings limit.

Can I reduce my taxable Social Security by donating to charity?

Charitable donations reduce your taxable income but do not reduce your combined income for Social Security tax purposes. Since combined income includes half your benefits regardless of deductions, charity donations will not lower the amount of your benefits that are taxed.

If I move to a state that does not tax Social Security, do I owe back taxes?

No. You owe state tax only on income earned while you were a resident of that state. Once you move and establish residency elsewhere, you file taxes in your new state under its rules. Some states offer credits for taxes paid to other states, so check with your new state's tax authority.

What happens if I underreport my Social Security income by mistake?

The IRS receives a copy of your Form SSA-1099, so they know how much you received. If your return does not match, you will receive a notice. Contact the IRS or a tax professional to file an amended return. Honest mistakes are usually resolved without penalty if you correct them promptly.