Social Security is taxed only if your other income crosses certain thresholds

Whether you owe federal income tax on your Social Security depends on your combined income—not just what you get from Social Security. The IRS uses a formula that adds your adjusted gross income, nontaxable interest, and half your Social Security benefits. If that total exceeds a threshold that depends on your filing status, you must include some or all of your Social Security in your taxable income.

The thresholds have not changed since 1984. For 2024, if you file as single and your combined income exceeds $25,000, up to 50 percent of your benefits become taxable. If it exceeds $34,000, up to 85 percent becomes taxable. For married filing jointly, those thresholds are $32,000 and $44,000. If you are married filing separately, the threshold is $0—meaning almost any combined income will trigger taxation.

This means many people with modest Social Security and little other income pay no tax at all. Others with pensions, investment income, or part-time work may owe tax on a portion of their benefits. The amount you actually owe depends on how far your combined income exceeds the threshold.

Key Takeaways

  • Social Security is only taxed if your combined income (wages, pensions, interest, plus half your benefits) exceeds $25,000 for single filers or $32,000 for married filing jointly.
  • If you are below the threshold, you owe no federal tax on your Social Security, even if you receive a large benefit.
  • Once you exceed the threshold, between 50 and 85 percent of your benefits may become taxable, depending on how much you exceed it.
  • Some states also tax Social Security benefits, but 38 states do not tax them at all.

How the IRS calculates whether your benefits are taxed

The IRS calls this calculation your combined income, and it works like this: take your adjusted gross income (wages, self-employment income, taxable pensions, taxable interest and dividends), add any nontaxable interest (like from municipal bonds), then add half of your Social Security benefits. That total is what determines whether you owe tax.

If your combined income is below the first threshold ($25,000 single, $32,000 married filing jointly), you owe no federal tax on Social Security. If it is between the first and second threshold ($25,000–$34,000 single, $32,000–$44,000 married filing jointly), up to 50 percent of your benefits is taxable. If it exceeds the second threshold, up to 85 percent is taxable.

The actual amount taxed is not always the full 50 or 85 percent. The IRS uses a two-step formula that can result in a lower percentage, depending on exactly how much you exceed the threshold. This is why two people with the same filing status and similar incomes might owe different amounts of tax.

Which income counts toward the threshold

Wages, self-employment income, and taxable pensions all count. So do taxable interest, dividends, capital gains, and rental income. Nontaxable interest (from municipal bonds, for example) also counts, even though you do not owe tax on it directly. Distributions from traditional IRAs and 401(k)s count as well.

Some income does not count: Roth IRA distributions (if you have held the account at least five years), workers' compensation, Supplemental Security Income (SSI), and veterans' benefits do not factor into the combined income calculation. Neither do gifts or inheritances.

If you are married filing separately, the threshold is $0, which means almost any income will trigger taxation of your benefits. This is why married couples almost always file jointly if one or both receive Social Security.

State taxes on Social Security

Thirty-eight states do not tax Social Security benefits at all. Twelve states do tax them, though most offer exemptions or partial exemptions based on age or income.

Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont tax Social Security to some degree. Illinois taxes it only for people under 62. Each state has its own thresholds and rules, so you will need to check your state's tax authority website or speak with a tax professional if you live in one of these states.

How to report Social Security on your tax return

If you receive Social Security, the Social Security Administration sends you a Form SSA-1099 by January 31 each year. This shows the total benefits you received in the prior year. You use this form to calculate whether any of your benefits are taxable.

If you owe tax on your benefits, you report the taxable amount on Form 1040 (the main federal income tax return). Worksheet A or Worksheet B in the instructions to Form 1040 walks you through the calculation. If you use tax software, it usually does this calculation for you once you enter your Social Security income.

You can also request that the Social Security Administration withhold federal income tax directly from your benefits. You do this by completing Form W-4V and submitting it to your local Social Security office. This way, you do not have to pay a lump sum when you file your return.

Withholding taxes from your benefits

If you know you will owe tax on your Social Security, you can have the IRS withhold it from each check. You choose the withholding rate—10, 15, 25, or 35 percent—on Form W-4V. This spreads the tax bill across the year instead of requiring a large payment when you file.

Withholding is optional, but it can help you avoid underpayment penalties if you do not have other income being withheld. If you have a pension or still work, your withholding from those sources might already cover your Social Security tax, so you may not need to withhold from benefits.

You can change your withholding at any time by submitting a new Form W-4V to your local Social Security office or by using your my Social Security account online.

What happens if you work while receiving Social Security

If you are under your full retirement age and you work, Social Security reduces your benefit by $1 for every $2 you earn above the annual limit. For 2024, that limit is $23,400. In the year you reach full retirement age, the reduction is $1 for every $3 you earn above $62,400, but only for earnings before the month you reach full retirement age.

Once you reach full retirement age, you can earn as much as you want with no reduction to your benefit. However, your earnings still count as income for the purpose of determining whether your benefits are taxed. This means working can push you over the combined income threshold and trigger taxation of your benefits, even though your benefit amount itself is not reduced.

Frequently Asked Questions

Can I avoid paying tax on Social Security by not cashing my checks?

No. The IRS counts Social Security as income in the year you receive it, regardless of whether you deposit the check. If you want to reduce your combined income, you would need to reduce other income sources—for example, by withdrawing less from retirement accounts or selling fewer investments.

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

Not if your combined income is below the threshold. If you are single with no other income and your Social Security is your only source, you likely do not have to file. However, if you have other income or if you had taxes withheld, filing may result in a refund.

What if I did not withhold enough tax and owe money when I file?

You can pay the balance due when you file your return. If you owe more than $1,000, you may owe an underpayment penalty. To avoid this next year, increase your withholding on Form W-4V or make estimated tax payments quarterly.

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

No. Each person's combined income is calculated separately. However, if you file jointly, the IRS adds both of your combined incomes together to determine whether either of you owes tax on benefits. This is why married couples usually file jointly.

Are there any ways to reduce the tax I owe on Social Security?

You cannot reduce the tax by reducing your Social Security. However, you can reduce other income—for example, by deferring a large withdrawal from a traditional IRA to a year when your other income is lower, or by managing the timing of capital gains. A tax professional can help you plan this.