Whether you pay tax on Social Security depends on your other income

The federal government taxes Social Security benefits for some people but not others, based on a calculation called combined income. Combined income is your adjusted gross income plus nontaxable interest plus half your Social Security benefits. If your combined income stays below a certain threshold, you owe no federal tax on your benefits. If it exceeds that threshold, you may owe tax on up to 85 percent of your benefits.

The thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. These numbers have not changed since 1984, so they affect more people now than they did when they were set. Your state may also tax Social Security benefits—some states tax them the same way the federal government does, some do not tax them at all, and some have their own rules.

Key Takeaways

  • You calculate combined income by adding your adjusted gross income, nontaxable interest, and half your Social Security benefits together.
  • If combined income is below $25,000 (single) or $32,000 (married filing jointly), you owe no federal tax on your benefits.
  • If combined income exceeds the threshold, between 50 and 85 percent of your benefits may be taxable, depending on how far over you are.
  • Thirteen states tax Social Security benefits in some form, while the rest do not; check your state's tax authority website to learn your state's rules.
  • The IRS publishes a worksheet in Publication 915 that walks you through the calculation step by step.

How the combined income calculation works

Combined income is not the same as your total income. Start with your adjusted gross income (AGI)—the number on line 11 of Form 1040. Then add any nontaxable interest you earned, such as interest from municipal bonds. Then add half of the Social Security benefits you received during the year. The sum is your combined income.

For example, if you had an AGI of $20,000, nontaxable interest of $500, and received $15,000 in Social Security benefits, your combined income would be $20,000 + $500 + ($15,000 ÷ 2) = $27,500. Since $27,500 exceeds the $25,000 threshold for single filers, some of your benefits would be taxable.

The IRS provides a detailed worksheet in Publication 915 that breaks this calculation into steps. You can read Publication 915 from irs.gov or request a printed copy by phone. The worksheet accounts for different filing statuses and walks you through which benefits count toward combined income.

The two-tier tax system for benefits over the threshold

Once your combined income exceeds the threshold, the amount of your benefits that becomes taxable depends on how far over you are. The system has two tiers, and the calculation can feel complicated, but the IRS worksheet makes it mechanical.

If you are single and your combined income is between $25,000 and $34,000, up to 50 percent of your benefits may be taxable. If your combined income is $34,000 or more, up to 85 percent of your benefits may be taxable. For married couples filing jointly, the first tier runs from $32,000 to $44,000 (50 percent taxable), and the second tier is $44,000 and above (up to 85 percent taxable).

The actual percentage depends on the exact amount you are over the threshold and your total benefits. You do not calculate this by hand—you use the worksheet in Publication 915, which applies the formula in the correct order. The result tells you how many dollars of your benefits are taxable, and you report that amount on your tax return.

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. The remaining states do not tax benefits at all.

Of the states that do tax benefits, most follow the federal rules closely—they use a similar combined income threshold and tax between 50 and 85 percent of benefits. A few states have their own thresholds or percentages. Colorado, for instance, taxes benefits only for people over age 55 with income above a certain level. Kansas exempts benefits entirely for people over 55.

You can find your state's specific rules on your state's department of revenue website. Search for "Social Security tax" and your state name. If you live in a state that taxes benefits and you owe federal tax on your benefits, you will likely owe state tax as well, though the amount may differ.

How to report taxable benefits on your tax return

If you received Social Security benefits during the year, the Social Security Administration sends you a Form SSA-1099 by January 31. This form shows the total benefits you received. You use this number, along with the Publication 915 worksheet, to calculate how much is taxable.

You report taxable Social Security benefits on Form 1040, lines 5a and 5b. Line 5a is the total benefits you received (from the SSA-1099). Line 5b is the taxable portion (the amount you calculated using the worksheet). The difference between the two is the nontaxable portion. You include the taxable portion in your total income for the year.

If you use tax software, the program typically walks you through the combined income calculation and fills in lines 5a and 5b automatically once you enter your benefits and other income. If you file by hand or work with a tax professional, they will use Publication 915 to determine the taxable amount.

Withholding and estimated tax payments

If you know some of your benefits will be taxable, you can ask Social Security to withhold federal income tax from your monthly payment. You do this by filling out Form W-4V and submitting it to Social Security. You can choose to withhold 7, 10, 15, or 22 percent of your benefits.

Withholding is optional, but it can help you avoid owing a large amount when you file your return. If you have other income—from a job, a pension, or investments—withholding from your benefits may not be enough to cover your total tax bill. In that case, you may need to make quarterly estimated tax payments using Form 1040-ES.

You can change your withholding at any time by submitting a new Form W-4V to Social Security. If you want to stop withholding, you can do that too. Social Security processes changes within a month or two.

Planning to reduce taxable benefits

If you are close to the combined income threshold, you may be able to reduce the amount of your benefits that are taxable by managing your other income. For example, if you have a choice about when to take a distribution from a traditional IRA, delaying it to a year when your other income is lower could keep your combined income below the threshold.

Roth IRA distributions do not count toward combined income, so converting funds from a traditional IRA to a Roth in a lower-income year might reduce your taxable benefits in future years. Charitable contributions can lower your AGI if you itemize deductions. Municipal bond interest does not count as taxable income, but it does count toward combined income, so it still affects your benefits.

These strategies involve trade-offs and depend on your specific situation. A tax professional or financial advisor can help you understand whether any of them make sense for you.

Frequently Asked Questions

Do I have to pay tax on all my Social Security benefits?

No. If your combined income is below the threshold for your filing status, you owe no federal tax on your benefits. Even if you are over the threshold, only up to 85 percent of your benefits can be taxed, never 100 percent. Some people owe tax on 50 percent, some on 85 percent, and some on nothing.

What counts as combined income?

Combined income is your adjusted gross income (the number on line 11 of Form 1040) plus any nontaxable interest plus half your Social Security benefits. It includes wages, self-employment income, pensions, IRA distributions, and investment income. It does not include Supplemental Security Income (SSI) or certain veterans benefits.

If I live in a state that does not tax Social Security, do I still owe federal tax?

Yes. State and federal taxes are separate. You may owe federal tax on your benefits even if your state does not tax them. You may also owe state tax even if you do not owe federal tax, depending on your state's rules and your income.

Can I change how much tax is withheld from my benefits?

Yes. You can submit Form W-4V to Social Security to request withholding of 7, 10, 15, or 22 percent of your monthly benefit. You can change your withholding or stop it at any time. Changes take effect within a month or two.

Where do I find Publication 915?

Publication 915 is available on irs.gov. Search for "Publication 915" or go to the IRS publications page. You can view it online, read a PDF, or request a printed copy by calling the IRS at 1-800-829-3676.