Pennsylvania does not tax Social Security benefits

Pennsylvania has no state income tax on Social Security retirement, survivor, or disability benefits. If Social Security is your only income source, you will not owe Pennsylvania state income tax on it. This applies whether you receive benefits as a retiree, a surviving spouse or child, or someone with a disability.

The federal government may still tax your Social Security depending on your total income, but Pennsylvania itself does not. This is one of the few income sources the state excludes from taxation.

Key Takeaways

  • Pennsylvania does not tax Social Security retirement, survivor, or disability benefits at the state level.
  • You may still owe federal income tax on Social Security if your combined income exceeds certain thresholds set by the IRS.
  • Other retirement income sources — pensions, 401(k) withdrawals, investment income — are taxed by Pennsylvania unless specifically exempted.
  • If you work while receiving Social Security, Pennsylvania taxes your wages normally, but your benefits themselves remain untaxed by the state.

How federal taxation of Social Security works

Even though Pennsylvania does not tax Social Security, the federal government may. The IRS uses a formula based on your "combined income," which includes half of your Social Security benefits plus all other income sources (wages, pensions, interest, dividends, and taxable withdrawals).

If your combined income exceeds $25,000 as a single filer or $32,000 as a married couple filing jointly, you may owe federal tax on up to 50 percent or 85 percent of your benefits, depending on how much you exceed the threshold. You will receive a Social Security Benefit Statement (Form SSA-1099) each January showing the amount the IRS considers taxable.

What other retirement income Pennsylvania does tax

While Social Security is exempt, Pennsylvania taxes most other retirement and investment income. If you receive a pension from a private employer, a 401(k) distribution, an IRA withdrawal, or interest and dividends from investments, Pennsylvania will tax that income at a flat rate of 3.07 percent.

Military pensions and certain government pensions have different rules. Military retirement pay is not taxed by Pennsylvania. Public employee pensions — from state, local, or federal government work — are also exempt from Pennsylvania taxation, but only if you were a government employee before a certain date or meet other conditions. Check with the Pennsylvania Department of Revenue if you receive a government pension.

If you work while receiving Social Security

Pennsylvania taxes wages you earn from work at the same 3.07 percent rate as other income. Your Social Security benefits themselves remain untaxed by the state, but your paycheck is subject to state income tax as usual.

The federal government has its own rules about working while on Social Security. If you are under full retirement age and earn above a certain amount, Social Security will reduce your monthly benefit. Once you reach full retirement age, you can earn any amount without a reduction. These federal limits do not change your Pennsylvania tax situation — only your federal benefit amount.

Filing requirements if you receive Social Security

You do not need to file a Pennsylvania state income tax return if Social Security is your only income. However, if you have other income — wages, a pension, investment earnings, or rental income — you must file a Pennsylvania return if that other income exceeds the filing threshold, which varies by age and filing status.

For 2024, the threshold is $12,000 for single filers under 65 and $13,000 for those 65 and older. If you are married filing jointly, the threshold is $24,000 under 65 and $25,000 for those 65 and older. When you file, you will report your Social Security benefit amount on the return, but it will not be taxed by Pennsylvania.

How to report Social Security on your Pennsylvania return

You will receive Form SSA-1099 from Social Security each January showing your total benefits for the previous year. When you file your Pennsylvania return, you report this amount but do not pay state tax on it. The form goes into your federal return calculation, not your Pennsylvania calculation.

If you also have other income, report that separately on the appropriate lines of your Pennsylvania return. The state's tax software and paper forms have separate sections for Social Security income and other income sources, making it clear which portions are taxed and which are not.

Frequently Asked Questions

Do I have to pay Pennsylvania tax on my spouse's Social Security if we file jointly?

No. Pennsylvania does not tax Social Security benefits for either spouse, regardless of filing status. If your spouse receives benefits and you file a joint return, neither of your Social Security amounts will be subject to Pennsylvania state income tax.

What if I receive both a pension and Social Security?

Pennsylvania taxes the pension at 3.07 percent but not the Social Security. You report both on your state return, but only the pension amount is subject to tax. If your pension is from a government employer, different rules may apply — check the exemption status of your specific pension.

Will I owe federal tax on my Social Security even though Pennsylvania doesn't tax it?

Possibly. The federal government uses a combined income test, and if your total income is high enough, the IRS will tax part of your benefits. Pennsylvania's decision not to tax Social Security does not affect your federal tax obligation. You may owe federal tax, state tax on other income, or both.

Do I need to file a Pennsylvania return if I only have Social Security income?

No, not unless you have other income that pushes you above the filing threshold. Social Security alone does not require you to file a Pennsylvania state return. If you have wages, a pension, or investment income, check the threshold for your age and filing status to see if you must file.