Pennsylvania does not tax Social Security benefits

Pennsylvania has no state income tax on Social Security retirement, survivor, or disability benefits. If you receive Social Security payments and live in Pennsylvania, the state will not withhold taxes from those payments or require you to report them as taxable income on your state return.

This applies whether you receive benefits as a retiree, as a survivor of a worker who died, or as a person with a disability. It also applies to Supplemental Security Income (SSI), which is a separate federal program for people with low income and limited resources.

However, Social Security benefits may still be taxable at the federal level, and other income you receive may be taxable in Pennsylvania. Understanding the difference between state and federal tax treatment is important if you file taxes.

Key Takeaways

  • Pennsylvania does not tax Social Security benefits at the state level, regardless of how much you receive or what other income you have.
  • The federal government may tax Social Security benefits if your combined income exceeds certain thresholds, even though Pennsylvania will not.
  • Other retirement income you receive — such as pensions, 401(k) withdrawals, or interest — may be taxable in Pennsylvania.
  • You do not need to report Social Security income on your Pennsylvania tax return, but you may need to report it on your federal return.

How federal taxation of Social Security works

The federal government uses a formula based on your "combined income" to determine whether your Social Security is taxable. Combined income means your adjusted gross income plus nontaxable interest plus half of your Social Security benefits.

If your combined income is below a certain threshold, none of your Social Security is taxable federally. If it exceeds the threshold, up to 50 percent or up to 85 percent of your benefits may be taxable, depending on how far over the threshold you go. These thresholds have not changed since 1984 and do not adjust for inflation.

For 2024, the thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. If you are married filing separately, a much lower threshold applies. These amounts are the same every year.

What income counts toward the federal threshold

Combined income includes wages, self-employment income, interest, dividends, capital gains, and distributions from retirement accounts. It also includes income from pensions, annuities, and rental property.

Some types of income do not count: tax-exempt interest (such as from municipal bonds) does not count toward the threshold, though it does count as income for other purposes. Distributions from a Roth IRA do not count. Neither do gifts or inheritances.

If you have very little other income, your Social Security may not be taxable federally even if you live in Pennsylvania. But if you have a pension, continue working part-time, or have investment income, you may owe federal tax on part of your benefits.

Pennsylvania income tax on other retirement income

While Pennsylvania does not tax Social Security, it does tax most other forms of retirement income. Distributions from traditional IRAs, 401(k)s, 403(b)s, and similar plans are taxable as income in Pennsylvania. Pension income is also taxable, with limited exceptions for military pensions and some public employee pensions.

Interest and dividends are taxable. Capital gains are taxable. Rental income is taxable. If you have any of these sources of income and live in Pennsylvania, you will owe state tax on them.

The Pennsylvania income tax rate is a flat 3.07 percent on most income. This rate applies to all residents regardless of age or income level.

When you need to file a Pennsylvania tax return

You must file a Pennsylvania return if your income from all sources exceeds the filing threshold for your situation. For 2024, the threshold is $8,500 for most people, though it is higher if you are over 65 or have certain types of income.

Even if your only income is Social Security, you do not need to file a Pennsylvania return because Social Security is not counted as income for this purpose. However, if you have any other income — even a small amount of interest or a part-time job — you may need to file.

The safest approach is to add up all your income except Social Security. If that total exceeds the threshold, file a return. If you are unsure, contact the Pennsylvania Department of Revenue or a tax preparer in your area.

How to report Social Security on your federal return

You will receive a Social Security Benefit Statement (Form SSA-1099) by January 31 each year showing the total benefits you received. Use this form to determine whether any of your benefits are taxable federally.

If you file a federal return, you must report your Social Security benefits on it, even if none of them are taxable. The IRS uses this information to verify your income and cross-check other returns. Do not omit Social Security from your federal return just because Pennsylvania does not tax it.

If you need help calculating how much of your Social Security is taxable federally, the IRS worksheet in Publication 915 walks through the calculation step by step. A tax preparer can also do this for you.

Frequently Asked Questions

Do I have to pay Pennsylvania tax on my Social Security?

No. Pennsylvania does not tax Social Security benefits at the state level. You will not owe Pennsylvania income tax on Social Security retirement, survivor, or disability benefits, regardless of the amount you receive or your other income.

If Pennsylvania doesn't tax Social Security, do I still have to report it?

You do not need to report Social Security on your Pennsylvania return. However, if you file a federal return, you must report it there. The federal government may tax part of your benefits depending on your other income, even though Pennsylvania will not.

What if I have a pension and Social Security?

Your pension is taxable in Pennsylvania at 3.07 percent. Your Social Security is not. Add up your pension and any other income (excluding Social Security). If the total exceeds the Pennsylvania filing threshold, you must file a state return and pay tax on the pension portion.

Does SSI count as income in Pennsylvania?

No. Supplemental Security Income (SSI) is not taxed by Pennsylvania or the federal government. Like Social Security, SSI is not counted as income for Pennsylvania tax purposes.

What if I moved to Pennsylvania after receiving Social Security elsewhere?

Pennsylvania does not tax Social Security regardless of where you lived before or how long you have been in the state. Your Social Security benefits remain untaxed by Pennsylvania from the moment you move there.