Social Security benefits can be taxable if your total income, including your benefits, is greater than the income limit, determined by your filing status. Social Security benefits include monthly retirement, survivor, and disability benefits.
Is Social Security income taxable?
It depends. Social Security income can be taxable, depending on your total income and filing status. To determine how much (if any) of your Social Security benefits are taxable, you must calculate your combined income, including your pension, wages, interest, dividends, capital gains, plus half of your Social Security benefits. If your overall income exceeds a certain amount for your filing status then, you may be required to pay taxes on a portion of your benefits.
In addition to regular Social Security benefits, other Social Security benefits like disability and survivor benefits may also be subject to tax.
- Social Security disability benefits are considered taxable and is subject to the same tax rules and thresholds as regular Social Security benefits.
- Social Security survivor benefits paid to your dependents are taxable to the child. However, the child typically won’t receive enough income to meet the threshold to be considered taxable.
Which states tax Social Security benefits?
Most states fully exempt Social Security income from taxes regardless of your overall income, and others offer exemptions up to certain income thresholds. Only a few states tax Social Security benefits to the same extent as they are taxed at the federal level. Currently, the following states tax Social Security benefits:
- Colorado
- Connecticut
- Kansas
- Minnesota
- Montana
- Nebraska
- New Mexico
- Rhode Island
- Vermont
- Utah
West Virginia is phasing out the tax on Social Security benefits, with a 100% deduction of Social Security benefits expected by 2026.
For more information on how your state taxes Social Security benefits, you can visit your state’s department of revenue website.
How much of your Social Security income is taxable?
The amount of tax you pay on Social Security benefits depends on your overall income. If your overall income falls below the income limit, then your benefits may be exempt from paying any tax. But if your overall income exceeds a certain amount, then a portion may be subject to federal income tax on either 50% of your benefits or 85% of your benefits.
The IRS uses your filing status to determine the income thresholds:
For taxpayers filing single, head of household, married filing separately, or qualifying widow:
- If your combined income is between $25,000 and $34,000, 50% of your social security benefits may be taxable.
- If your combined income exceeds $34,000, 85% of your social security benefits may be taxable.
For taxpayers filing married filing jointly:
- If your combined income (you and your spouse’s overall income plus half your Social Security benefits and half your spouse’s Social Security income) is between $32,000 and $44,000, 50% of your Social Security benefits may be taxable.
- If your combined income exceeds $44,000, 85% of your social security benefits may be taxable.
When to pay Social Security income tax
Fedeal income tax on Social Security benefits isn’t typically withheld from your Social Security payments automatically. But if you prefer to pay tax throughout the year instead of as a lump sum on Tax Day you have options:
- You can request voluntary tax withholding from your benefits by submitting IRS Form W-4V. Meaning a portion of your benefits will be withheld and paid to the IRS each month.
- You can make quarterly estimated tax payments directly to the IRS.
This flexibility lets you choose the best method for your financial planning and helps avoid any surprises during tax season.
At what age is Social Security no longer taxed?
There isn’t a specific age when Social Security benefits stop being taxed. Instead, it depends on your filing status and the total amount of your combined income. This includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits. If these combined resources exceed certain thresholds, a portion of your benefits might be taxable.
Social Security tax forms to report your benefits
You should report the taxable portion of your Social Security benefits on line 5b of Form 1040. This amount is calculated based on your total income and benefits for the tax year.
Note: TaxSlayer determines if your benefits are taxable based on the information you provide and calculates the taxable portion for you.
Where to report Social Security benefits on your tax return
The taxable portion of your Social Security is reported on line 6a and 6b of Form 1040. This amount is based on the total amount of your income and benefits for the tax year.
If your benefits are taxable, your net amount of Social Security benefits should be recorded on line 5a of Form 1040, U.S. Individual Income Tax Return.
When you file with TaxSlayer, you’re guided through the tax filing experience step by step. The calculations are done for you, and your information will be entered into the correct form before it is sent to the IRS.
