Whether You Pay Tax on Social Security Depends on Your Other Income

You may owe federal income tax on your Social Security benefits, but only if your total income exceeds a certain threshold. The IRS uses a formula called combined income to decide this — it adds your adjusted gross income, nontaxable interest, and half your Social Security benefits together. If that number stays below the threshold for your filing status, you pay no tax on Social Security. If it goes above, you may owe tax on up to 50 percent or 85 percent of your benefits.

The thresholds have not changed since 1984. For 2024, if you file as single, the first threshold is $25,000 and the second is $34,000. If you file as married filing jointly, the 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. State taxes are separate; some states tax Social Security benefits and some do not.

Key Takeaways

  • You calculate whether you owe tax using combined income, which includes half your Social Security benefits plus your other income sources.
  • The IRS thresholds are $25,000 for single filers and $32,000 for married filing jointly; income above these amounts may trigger taxation on your benefits.
  • If you are still working while receiving Social Security, your wages count toward the combined income threshold and may push you into taxable territory.
  • Some states do not tax Social Security at all, while others tax it the same way the federal government does or have their own rules.
  • You can request that Social Security withhold federal income tax from your monthly payment to avoid a large bill at tax time.

How Combined Income Is Calculated

Combined income is not the same as your adjusted gross income (AGI). To find your combined income, start with your AGI from your tax return, add back any nontaxable interest (such as interest from municipal bonds), and then add half of your Social Security benefits. That total is what the IRS compares to the thresholds.

The reason half your benefits are included in the calculation is historical — the formula was designed so that people with modest retirement income would not be taxed, while those with substantial other income would be. If you receive $20,000 in Social Security and have $10,000 in pension income, your combined income is $10,000 plus $10,000 (half of $20,000), which equals $20,000. That is below the $25,000 threshold for single filers, so none of your benefits are taxed.

If you are married and file jointly, both spouses' Social Security benefits and both spouses' other income count toward the combined income calculation. You cannot separate them or file separately to avoid the threshold — in fact, married filing separately almost always results in taxation of benefits.

What Counts as Income for This Calculation

Wages from employment count fully. If you are still working and receiving Social Security, your salary, self-employment income, and tips all go into the combined income calculation. Pension income, interest, dividends, and capital gains also count. Distributions from traditional IRAs and 401(k)s count as well.

Some income does not count. Supplemental Security Income (SSI) is not included. Veterans benefits are not included. Gifts and inheritances do not count. Return of principal from a bond or CD does not count — only the interest earned counts. Roth IRA distributions do not count toward combined income, though they may be taxable on their own.

If you have rental income, that counts. If you have income from a business, that counts. If you received a distribution from an inherited IRA, that counts. The key is whether the IRS considers it income on your tax return — if it does, it factors into the combined income calculation.

The Two Taxation Tiers

The IRS uses two thresholds, and the amount of your benefits that becomes taxable depends on which one you cross. If your combined income is between the first and second threshold, up to 50 percent of your benefits may be taxable. If your combined income exceeds the second threshold, up to 85 percent of your benefits may be taxable.

For single filers in 2024, the first threshold is $25,000 and the second is $34,000. If your combined income is $28,000, you are $3,000 above the first threshold. The IRS takes the lesser of (1) half of the amount over the threshold, or (2) half your total benefits. If your benefits are $20,000, half is $10,000. Half of the $3,000 overage is $1,500. The lesser amount is $1,500, so $1,500 of your benefits are taxable.

If your combined income is $40,000, you are $6,000 above the second threshold. Now the calculation is more complex and involves both tiers. Generally, the result is that a larger portion of your benefits becomes taxable — potentially up to 85 percent. The IRS worksheet on Form 1040 or the Social Security Administration's online calculator can show you the exact amount.

State Taxes on Social Security

Thirteen states tax Social Security benefits to some degree: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. The rules vary by state. Some follow the federal formula closely. Others have their own thresholds or tax all benefits above a certain income level.

Colorado, Kansas, and Missouri have passed laws to phase out taxation of Social Security benefits, but the phase-out is gradual and not yet complete. If you live in one of these states, check your state tax return instructions or contact your state revenue department to see whether your benefits are taxable under current law.

If you live in a state that does not tax Social Security — including Florida, Texas, Pennsylvania, and most others — you will not owe state income tax on your benefits even if you owe federal tax. Some people move to a no-tax state specifically to avoid this, though you should consider all tax implications before relocating.

Withholding Tax From Your Social Security Payment

You can ask Social Security to withhold federal income tax from your monthly benefit payment. This is optional, but it can help you avoid owing a large amount when you file your tax return. You request withholding by completing Form W-4V and submitting it to your local Social Security office or mailing it to Social Security.

You can choose to have 7, 10, 12, or 22 percent of your benefit withheld, or you can specify a flat dollar amount. If you are unsure how much to withhold, the IRS Withholding Estimator tool can help. Keep in mind that withholding reduces your monthly payment, so you receive less cash now in exchange for a smaller tax bill later.

Withholding is not required. If you prefer to pay your tax bill in full when you file your return, or if you expect to owe no tax, you do not have to request withholding. Some people use withholding only in years when they have unusually high other income, such as a year they sell an investment property.

How to Report Social Security on Your Tax Return

Social Security sends you a Form SSA-1099 each January showing the total benefits you received in the prior year. You use this form to fill out your tax return. If you file Form 1040, you report your benefits on lines 5a and 5b. Line 5a is the total from your SSA-1099. Line 5b is the taxable portion, which you calculate using the worksheet in the Form 1040 instructions or using the Social Security Administration's online calculator.

If your combined income is below the first threshold, you enter zero on line 5b and you are done — none of your benefits are taxable. If your combined income is above a threshold, you work through the IRS worksheet to find the taxable amount and enter that on line 5b. That amount is then included in your total income for the year.

If you received benefits for only part of the year — for example, you started receiving them in June — the SSA-1099 will show only the months you received payments. The calculation remains the same; you use the actual amount shown on the form.

Frequently Asked Questions

Can I reduce my combined income to avoid paying tax on Social Security?

You cannot reduce your actual income, but you can plan ahead. If you are still working, you might reduce hours or defer income to a later year. If you have the choice of when to take distributions from a traditional IRA, you might delay them until a year when your other income is lower. Some people use Roth conversions strategically to manage combined income across multiple years.

What if I did not know I owed tax on my Social Security and did not pay?

The IRS will send you a notice if you owe tax. You can pay the amount owed, plus any interest and penalties that have accrued. If you believe you made an honest mistake, you may be able to request penalty relief. Contact the IRS or a tax professional to discuss your situation.

Does my spouse's Social Security affect whether I owe tax on mine?

Yes, if you file jointly. Both spouses' benefits and both spouses' income are combined into a single calculation. If you file separately, each spouse's benefits and income are calculated separately, but married filing separately almost always results in taxation of benefits for both spouses.

If I delay claiming Social Security, will I owe less tax?

Delaying does not change the tax rules — it just means you receive a higher monthly benefit when you do claim. Whether delaying reduces your total tax burden depends on your other income in each year. If you have substantial other income now but expect less later, delaying might lower your combined income in future years.

Are there any Social Security benefits that are not taxable?

Supplemental Security Income (SSI) is not taxable and does not count toward the combined income calculation. However, SSI is a different program from regular Social Security retirement or disability benefits. If you receive SSI, your SSA-1099 will show it separately and you should not include it on your tax return as income.