Is social security taxable? (2024)

Many retirees rely on their Social Security income to support their lifestyle. But many find themselves wondering whether those benefits will be taxable. The answer isn’t exactly a simple one — some of your Social Security income could be taxable, but not all of it.

Whether your benefits are taxable depends on your annual income. Keep reading to learn how much of your Social Security income will be taxable, how to file taxes for your Social Security income, states that tax Social Security benefits, and more.

Calculating your social security tax rate

To figure out whether you have to pay federal income tax on your Social Security benefits, you must determine the total amount of your combined income. This is calculated by adding your nontaxable interest and half of your Social Security benefits to your adjusted gross income (or AGI). AGI includes earnings, investment income, retirement plan withdrawals, pension payments and other taxable income. Here’s the formula:

AGI + nontaxable interest + ½ of Social Security benefits = Combined income

If you’re single and your combined income is between $25,000 and $34,000 a year — or if you’re married and file jointly and your combined income is between $32,000 and $44,000 a year — up to 50% of your Social Security benefits will be taxable.

Meanwhile, if you’re single and your combined income is more than $34,000 a year — or if you’re married and file jointly and your combined income is more than $44,000 a year — up to 85% of your Social Security benefits will be taxable. No more than 85% of Social Security benefits are ever taxable, regardless of the amount of your earned income.

Filing status

Combined income

Social Security income subject to taxes

Single, Head of Household, Married Filing Separately

Less than $25,000

0%

$25,000 - $34,000

Up to 50%

More than $34,000

Up to 85%

Married filing jointly

Less than $32,000

0%

$32,000 - $44,000

Up to 50%

More than $44,000

Up to 85%

How to file social security income on your federal taxes

The process of reporting your Social Security income on your taxes isn’t all that different from reporting any other type of income. First, if you received Social Security income, you’ll receive Form SSA-1099, the Social Security Benefit Statement. In Box 5 of that form, you’ll see your net Social Security benefits for the year, whether they were retirement benefits, survivor benefits, or disability benefits.

When it’s time to report your Social Security income1, you’ll complete Form 1040, the U.S. Individual Income Tax Return or Form 1040-SR, the U.S. Tax Return for Seniors. You’ll report your total retirement benefits on line 6a of this form.

In addition to reporting your entire Social Security income, you’ll also report the taxable portion of your benefits. In line 6b, you’ll report the amount of your benefits you’ll pay taxes on. You can use the formula above to determine the taxable portion of your benefits.

Impact of non-taxable income (other than non-taxable interest)

If you have other taxable income to report in addition to your Social Security income, it may be coming from a retirement account such as a 401(k) plan or individual retirement account (IRA). Any taxable income you get from your 401(k) or a traditional IRA, in addition to non-exempt interest, will count toward your combined income for the year meaning it could result in you paying additional taxes on your Social Security benefits.

However, distributions you receive from non-taxable sources such as Roth IRAs or after-tax sources such as a savings or brokerage account, may not count toward your combined income, meaning it won’t result in counting towards the formula for calculating the taxation of your Social Security benefits. Consideration should be given to consulting with a financial planning professional in determining the best course of action and order of account withdrawal for your specific circ*mstances. When you add funds to a savings account, you do so with after-tax money so any withdrawals of your principle will not be taxed, but earnings inside the account will be taxed. When you contribute to a Roth IRA, you do so with after-tax money. Because you’ve already paid taxes on those funds, you’ll never pay taxes on them again, including during retirement. In addition, any earnings or gains inside the Roth IRA also will also not be subject to income tax. Not only do withdrawals from a Roth IRA not count toward your combined income for the purpose of Social Security benefits, but those withdrawals themselves also aren’t taxed.

If you’ve already been contributing to a Roth IRA, then you’ll already be able to enjoy these perks during retirement. Even if you haven’t already been contributing to a Roth account, you can convert your traditional IRA funds to a Roth IRA. However, the conversion amount will count towards your combined income in the year of conversion, and therefore potentially cause more of your Social Security income to be taxed, up to the 85% maximum.

It’s worth stressing, that a Roth IRA conversion won’t help you avoid taxation completely. Because you’re moving money from a pre-tax to an after-tax account, a Roth conversion will require that you pay income taxes on the full amount in the tax year you convert.

Another benefit of having your money in a Roth IRA rather than a traditional account is you won’t be subject to the required minimum distributions. As a result, you can leave the money in your account as long as you want. On the other hand, 401(k)s and traditional IRAs require distributions starting at age 72, meaning you’re forced to have additional income, even if you don’t need it.

State taxes on Social Security benefits

Depending on where you live, you might also have to pay state income tax in addition to federal income tax on your Social Security benefits. The level of taxation on your Social Security benefits depends on the state in which you live. For example, Minnesota and Utah tax Social Security income in the same way as the federal government, meaning you could pay taxes on between 0% and 85% of your benefits. Other states offer additional exemptions or deductions based on your income or age, meaning you could pay even less in taxes.

The following 9 states assess varying levels of state income tax on Social Security:

Colorado

Colorado taxes Social Security benefits for taxpayers who receive over a certain amount2 in benefits. For taxpayers between age 55 and 54, the first $20,000 of retirement benefits are not taxable; taxpayers aged 65 and older are not taxed on any of their Social Security benefits.

Connecticut

Connecticut taxes Social Security benefits for taxpayers with AGIs over $75,0003 ($100,000 if married filing jointly).

Kansas

Kansas taxes Social Security for taxpayers with AGIs over $75,0004, regardless of filing status.

Minnesota

Minnesota taxes Social Security benefits for taxpayers with AGIs over $82,190 ($105,380 if married filing jointly or $52,690 if married filing separately).5

Montana

Montana taxes Social Security benefits for taxpayers with AGIs over $25,0006 ($32,000 if married filing jointly or $25,000 if married filing separately).

New Mexico

New Mexico taxes Social Security benefits for taxpayers with more than $100,0007 in income ($150,000 if married filing jointly or $75,000 if married filing separately).

Rhode Island

Rhode Island taxes Social Security benefits for taxpayers who begin receiving retirement benefits before reaching Social Security’s full retirement age (usually 67) or if your AGI is over $101,0008 ($126,250 for married filing jointly or $101,025 for married filing separately).

Utah

Utah taxes Social Security benefits for taxpayers with AGIs over $45,0009 ($75,000 if married filing jointly or $37,500 if married filing separately).

Vermont

Vermont taxes Social Security for taxpayers with AGIs above $60,00010 ($75,000 if married filing jointly). People with AGIs between $50,000 and $59,999 ($65,001 and $74,999 if married filing jointly) get a partial exemption.

Read more: States that don’t tax retirement income

Social Security tax FAQs

At what age is Social Security no longer taxable?

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

Do I have to file taxes if my only income is Social Security?

If Social Security benefits were your only income in a given year and you receive less than $25,000 in benefits, your Social Security income is generally not taxable, and you probably do not need to file a federal income tax return. Be sure to confirm that you have no other sources of income, including investment income, retirement withdrawals, and pension payments.

When did Social Security become taxable?

Social Security benefits became taxable in 198411 following passage of a set of Amendments in 1983, which were signed into law by President Reagan in April 1983. These amendments passed the Congress in 1983 on a bi-partisan vote.

Why is Social Security taxed twice?

If your combined income is above the threshold that triggers taxation at the federal level, and you live in one of the 9 states that also tax Social Security benefits, then your Social Security benefits may be described as being taxed twice.

Read more: What taxes do I pay in retirement?

Tips for saving on taxes in retirement

Planning ahead can help you minimize the amount of income tax you must pay on Social Security benefits.

For example, you can try to maximize the amount of taxable income you receive in the years before you start tapping benefits by withdrawing funds from tax-sheltered retirement accounts like IRAs and 401(k)s. Additionally, contributing to a Roth IRA can help reduce your tax burden during retirement.

Some retirees also choose to live in tax-friendly states during retirement. While this isn’t a feasible or desirable option for everyone, it’s one that could reduce your tax burden. Many states don’t tax Social Security income. In fact, some states have no income taxes at all, which could help you save even more money.

Read more: Get the most out of your retirement income

Next Steps

It’s never too early to start thinking about your retirement plan and figuring out how much you should save per month to reach your retirement goals. Nevertheless, when retirement comes around it can be difficult to navigate how to meet your obligations as a taxpayer, while reducing your tax burden legally can be challenging. For further guidance on your tax responsibilities during retirement, you may want to consider working with a tax professional.

Read more: The best U.S. states to retire in 2024

1 IRS. ‘Regular & Disability Benefits.’ January 2024.

2 Colorado Department of Revenue. ‘Income Tax Topics: Social Security, Pensions, and Annuities.’ February 2023.

3 Connecticut Office of Legislative Research. ‘Income Tax Exemptions for Retirement Income.’ December 2023.

4 Kansas Department of Revenue. ‘Frequently Asked Questions About Individual Income.’ February 2024.

5 Minnesota Department of Revenue. ‘Tax Year 2024 Inflation-Adjusted Amounts In Minnesota Statutes.’ January 2024.

6 Montana Department of Revenue. ‘Individual retirement income.’ February 2024.

7 New Mexico Department of Revenue and Taxation. ‘Social security income tax exception.’ February 2024.

8 Rhode Island Department of Revenue. ‘Inflation-adjusted amounts set for Tax Year 2024.’ January 2024.

9 Utah.gov. ‘Social Security Benefits.’ February 2024.

10 Vermont Department of Taxes. ‘Seniors and Retirees.’ February 2024.

11 Social Security Administration. ‘Myths and misinformation about Social Security - Part 2.’ February 2024.

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Is social security taxable? (2024)

FAQs

Is social security taxable? ›

Substantial income includes wages, earnings from self-employment, interest, dividends, and other taxable income that must be reported on your tax return. Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. More than $34,000, up to 85% of your benefits may be taxable.

How much of your Social Security income is taxable? ›

Substantial income includes wages, earnings from self-employment, interest, dividends, and other taxable income that must be reported on your tax return. Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. More than $34,000, up to 85% of your benefits may be taxable.

At what age is Social Security no longer taxable? ›

Social Security tax FAQs

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

Do I have to file taxes if my only income is Social Security? ›

Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.

Is Social Security considered earned income? ›

Unearned Income is all income that is not earned such as Social Security benefits, pensions, State disability payments, unemployment benefits, interest income, dividends, and cash from friends and relatives. In-Kind Income is food, shelter, or both that you get for free or for less than its fair market value.

How do I get the $16728 Social Security bonus? ›

Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.

How much can a 70 year old earn without paying taxes? ›

For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older. Married retirees filing separately who earn less than ...

How much of my Social Security income is taxable in 2024? ›

Single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits. Do you need help figuring out your required minimum distributions?

How much can a retired person make before Social Security is taxed? ›

Unless your combined income for 2024 is less than $25,000 (less than $32,000 for married couples filing jointly), a percentage of your Social Security payments will be subject to income tax.

At what point in the year do you stop paying Social Security tax? ›

The Bottom Line. When do you stop paying Social Security tax? The answer is almost always "never" as long as you're employed but there are exceptions. Consider consulting with a tax professional if you think any of these situations or exceptions might apply to you.

How much can you make without Social Security being taxed? ›

Your Social Security is not taxable if your total income for the year is less than $25,000 and you file as a single, individual taxpayer. Half or 50% is taxable if your income is in the $25,000 to $34,000 range. Up to 85% of your benefits may be taxable if your total income is higher.

At what age do seniors stop paying federal taxes? ›

Taxes aren't determined by age, so you will never age out of paying taxes. Basically, if you're 65 or older, you have to file a return for tax year 2023 (which is due in 2024) if your gross income is $15,700 or higher. If you're married filing jointly and both 65 or older, that amount is $30,700.

Why is Social Security taxed twice? ›

The Introduction of Taxes on Benefits

The rationalization for taxing Social Security benefits was based on how the program was funded. Employees paid in half of the payroll tax from after-tax dollars and employers paid in the other half (but could deduct that as a business expense).

How much of my Social Security is taxable income? ›

The federal government can tax up to 85% of your Social Security benefits, so it's good to know how those taxes are calculated. It may come as a surprise, but Social Security benefits are not entirely tax-free. Depending on your income, up to 85% of your Social Security benefits can be subject to tax.

What type of income is not taxable? ›

Nontaxable income won't be taxed, whether or not you enter it on your tax return. The following items are deemed nontaxable by the IRS: Inheritances, gifts and bequests. Cash rebates on items you purchase from a retailer, manufacturer or dealer.

What income reduces Social Security benefits? ›

If you're younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you're younger than full retirement age during all of 2024, we must deduct $1 from your benefits for each $2 you earn above $22,320.

How much of Social Security wages are taxable? ›

The Social Security (OASDI) tax is 6.2% each for employees and employers, for a total of 12.4%. You pay the entire 12.4% if you're self-employed. Income over a certain threshold is not subject to Social Security tax. That threshold is $168,600 in 2024.

How do I calculate my taxed Social Security earnings? ›

The third page of your Social Security Statement includes your earnings record. This shows you each year you've worked, your taxed Social Security earnings for each year and your taxed Medicare earnings for each year.

How much tax should I withhold from my Social Security check? ›

Withholding on Social Security Benefits

You can elect to have federal income tax withheld from your Social Security benefits if you think you'll end up owing taxes on some portion of them. Federal income tax can be withheld at a rate of 7%, 10%, 12%, or 22% as of the tax year 2022.

Is Social Security taxed before or after Medicare is deducted? ›

Taxation Order: Social Security and Medicare deductions follow a specific taxation order. Generally, Social Security benefits are subject to taxation based on a portion of the benefits received. Once the taxable portion of Social Security benefits is determined, Medicare premiums are deducted from the remaining amount.

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