Nevada does not tax Social Security benefits at the state level

Nevada has no state income tax, which means the state does not tax Social Security benefits. If you receive Social Security in Nevada, you will not owe Nevada state income tax on those benefits, regardless of how much you receive or what other income you have.

However, the federal government may still tax your Social Security benefits depending on your total income. Federal taxation of Social Security is separate from Nevada state taxation and follows rules set by the Internal Revenue Service (IRS). Understanding both the state and federal picture matters when you file your taxes.

Key Takeaways

  • Nevada imposes no state income tax on Social Security benefits or any other income.
  • The federal government may tax up to 85 percent of your Social Security benefits if your combined income exceeds certain thresholds.
  • Combined income includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits.
  • You may need to file a federal tax return even if Social Security is your only income, depending on the amount you receive.
  • The IRS provides worksheets and Form SSA-1099 to help you calculate whether your benefits are taxable at the federal level.

How the federal government taxes Social Security

The IRS uses a calculation called combined income to determine whether your Social Security is taxable. Combined income is the sum of three things: your adjusted gross income (wages, pensions, interest, dividends), any nontaxable interest you earned, and half of your Social Security benefits for the year.

If your combined income falls below a certain threshold, none of your Social Security is taxable. If it exceeds the threshold, up to 50 percent or up to 85 percent of your benefits may be taxable, depending on how much you exceed it. The thresholds are different for people who are married filing jointly, single, or married filing separately.

For 2024, the thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. These thresholds have not changed since 1984, even though the cost of living has risen significantly. As a result, more people pay federal tax on their benefits now than in the past.

What counts as income for this calculation

Combined income includes wages, self-employment income, pensions, annuities, capital gains, rental income, and interest from savings accounts and bonds. It also includes nontaxable interest from municipal bonds, which many people do not expect to count.

Certain income does not count toward combined income. Supplemental Security Income (SSI), Medicaid benefits, food stamps, and housing information do not count. Veterans' benefits also do not count unless you chose to include them in your adjusted gross income.

If you are married filing jointly, the IRS combines the income of both spouses, even if only one of you receives Social Security. This can push a couple over the threshold even if each person's individual income is low.

When you must file a federal tax return

You may need to file a federal tax return even if Social Security is your only income. The IRS requires you to file if your gross income is above a certain amount, which varies by age and filing status. For 2024, a single person age 65 or older must file if their gross income is $15,000 or more.

Even if you are not required to file, you may want to file anyway. If federal taxes were withheld from your Social Security benefits, you may be due a refund. If you had other income and paid estimated taxes, filing allows you to claim refundable credits like the Earned Income Tax Credit.

The Social Security Administration sends Form SSA-1099 to all beneficiaries by January 31 each year. This form shows the total benefits you received in the previous year and is used to complete your federal tax return.

How to calculate your federal tax on Social Security

The IRS provides a worksheet in Publication 915 to calculate whether your benefits are taxable and how much. You can also use the IRS Interactive Tax Assistant tool on the IRS website, which walks you through the calculation step by step.

If you use tax software, most programs will ask you to enter your Social Security income and will calculate the taxable amount automatically. If you work with a tax professional, bring your Form SSA-1099 and information about any other income you received during the year.

The calculation is complex because it involves multiple thresholds and different percentages depending on your total income. Working through it once with a tax professional can help you understand whether you need to withhold taxes or make estimated payments in future years.

Withholding taxes from your Social Security check

If you expect your Social Security to be taxable, you can ask the Social Security Administration to withhold federal income tax from your monthly benefit. You do this by completing Form W-4V and submitting it to your local Social Security office or online through your my Social Security account.

You can choose to withhold 7, 10, 12, or 22 percent of your benefit. Withholding reduces the amount you receive each month but can help you avoid owing a large amount when you file your tax return. If you have other income, you may want to coordinate withholding across all your income sources so you do not over-withhold or under-withhold.

You can change your withholding at any time by submitting a new Form W-4V. If you did not withhold enough during the year, you can make an estimated tax payment to the IRS directly.

Other Nevada tax considerations for retirees

Because Nevada has no state income tax, you do not owe Nevada tax on pensions, retirement account withdrawals, or investment income either. This applies whether you are a Nevada resident or a nonresident who receives income from Nevada sources.

Nevada does have property tax on real estate and personal property tax on vehicles. These taxes are separate from income tax and explore to all property owners regardless of whether their income is taxable. Nevada also has sales tax, which applies to most purchases.

If you moved to Nevada from another state, check whether that state taxes your Social Security. Some states do tax Social Security benefits, and you may still owe tax to your former state if you were a resident when you began receiving benefits.

Frequently Asked Questions

Do I have to pay Nevada state tax on my Social Security?

No. Nevada has no state income tax, so you do not owe Nevada tax on Social Security benefits or any other income. However, you may still owe federal income tax depending on your total income.

What is the federal income threshold for taxing Social Security in 2024?

For single filers, the threshold is $25,000 of combined income. For married couples filing jointly, it is $32,000. If your combined income exceeds these amounts, up to 85 percent of your benefits may be taxable at the federal level.

Can I reduce the amount of federal tax I owe on Social Security?

You cannot reduce the amount that is taxable, but you can manage when you pay the tax. You can ask Social Security to withhold federal income tax from your monthly check, or you can make estimated tax payments to the IRS. You can also coordinate withholding across multiple income sources.

If I move to Nevada from another state, will I still owe tax to my old state?

That depends on the other state's rules. Some states tax Social Security benefits only if you were a resident when you began receiving them. Contact your former state's tax authority or a tax professional to find out whether you still owe tax there.

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

It depends on how much you received. For 2024, a single person age 65 or older must file if gross income is $15,000 or more. Even if you are not required to file, you may want to file to claim a refund if taxes were withheld from your benefits.