Are Social Security benefits taxable?

by | May 2, 2025 | Income Reporting, Individual Taxes

Here’s what HIVE AI had to say about “Are Social Security benefits taxable?”:

Yes, Social Security benefits can be taxable, but whether they are taxable and to what extent depends on your total income and filing status.

Basic Taxability Rules

Social Security benefits include monthly retirement, survivor, and disability benefits. They don’t include supplemental security income (SSI) payments, which aren’t taxable. Social Security benefits include monthly retirement, survivor and disability benefits. They don’t include supplemental security income (SSI) payments, which aren’t taxable. IRS.gov FAQ

The taxable portion of the benefits that’s included in your income and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year. IRS.gov FAQ Up to 85% of your Social Security benefits may be subject to federal income tax, depending on your income level.

Income Thresholds for Taxation

Your benefits may be taxable if your “combined income” exceeds certain thresholds. Combined income is calculated as:

  • One-half of your Social Security benefits, plus
  • All of your other income, including tax-exempt interest

Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status. The base amount for your filing status is:

  • $25,000 if you’re single, head of household, or qualifying surviving spouse
  • $25,000 if you’re married filing separately and lived apart from your spouse for the entire year
  • $32,000 if you’re married filing jointly
  • $0 if you’re married filing separately and lived with your spouse at any time during the tax year IRS.gov FAQ

Married Couples Filing Jointly

If you’re married and file a joint return, you and your spouse must combine your incomes and Social Security benefits when figuring the taxable portion of your benefits. Even if your spouse didn’t receive any benefits, you must add your spouse’s income to yours when figuring on a joint return if any of your benefits are taxable. IRS.gov FAQ

Calculating the Taxable Amount

The amount of your Social Security benefits that is taxable is determined using a formula:

  • If your combined income is below the base amount for your filing status, none of your benefits are taxable.
  • If your combined income exceeds the base amount, up to 50% of your benefits may be taxable.
  • If your combined income substantially exceeds the base amount, up to 85% of your benefits may be taxable.

If the only income you received during the year was your social security or equivalent tier 1 RRTA benefits, your benefits are generally not taxable. If you received income during the year in addition to social security or equivalent tier 1 RRTA benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than: • $25,000 if you are single, head of household, or qualifying surviving spouse; • $25,000 if you are married filing separately and lived apart from your spouse for all of 2023; • $32,000 if you are married filing jointly; or • $0 if you are married filing separately and lived with your spouse at any time during 2023. IRS – Publication 907: Tax Highlights for Persons With Disabilities

Reporting Social Security Benefits on Your Tax Return

The net amount of Social Security benefits that you receive from the Social Security Administration is reported in Box 5 of Form SSA-1099, Social Security Benefit Statement, and you report that amount on line 6a of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors. You report the taxable portion of your Social Security benefits on line 6b of Form 1040 or Form 1040-SR. IRS.gov FAQ IRS.gov FAQ

Historical Context of Social Security Taxation

Social Security benefits were not always taxable. At one time, railroad retirement and Social Security benefits were generally tax exempt. Because of fiscal necessities, however, Congress has imposed income tax on these benefits for the last 40 years. Dawson U.S. Tax Court Opinions: Kenneth Steven Tuma, Sr. & Deborah Ann Tuma Dawson U.S. Tax Court Opinions: Kenneth Steven Tuma, Sr. & Deborah Ann Tuma

Congress determined that the “policy for excluding all social security benefits from a recipient’s gross income is inappropriate.” Consequently, Congress enacted section 86 in 1983 reasoning that “social security benefits are in the nature of benefits received under other retirement systems”; therefore, like the benefits received under these other retirement systems, Social Security benefits should be taxable. In determining this initial taxable amount Congress considered taxing only a portion of Social Security benefits, “up to one-half of benefits in excess of a certain base amount.” This “base amount” was to ensure that “lower-income individuals, many of whom rely upon their benefits to afford basic necessities, will not be taxed on their benefits.” Dawson U.S. Tax Court Opinions: Patrick C. Kelley Dawson U.S. Tax Court Opinions: Patrick C. Kelley Dawson U.S. Tax Court Opinions: Patrick C. Kelley Dawson U.S. Tax Court Opinions: Patrick C. Kelley

Disability Benefits

Since 1984, social security disability benefits have been treated in the same manner as other social security benefits and are subject to tax, pursuant to section 86. The House report states in relevant part: ‘Social security benefits potentially subject to tax will include any workmen’s compensation whose receipt caused a reduction in social security disability benefits. For example, if an individual were entitled to $10,000 of social security disability benefits, but received only $6000 because of the receipt of $4000 of workers’, workmen’s compensation benefits, then for purposes of the provisions taxing social security benefits, the individual will be considered to have received $10,000 of social security benefits.’ Moreover, we have consistently held that reduction of social security disability benefits due to the receipt of benefits under a workmen’s compensation act does not reduce the total amount of taxable social security benefits. Dawson U.S. Tax Court Opinions: George F. Ventura Dawson U.S. Tax Court Opinions: George F. Ventura Dawson U.S. Tax Court Opinions: George F. Ventura

Social Security benefits are taxed under section 86. Section 86 requires the inclusion in gross income of up to 85% of the Social Security benefits received, including Social Security disability benefits. Dawson U.S. Tax Court Opinions: Kenneth Steven Tuma, Sr. & Deborah Ann Tuma

When You Don’t Need to File a Return

Generally, if social security benefits are the taxpayer’s only source of income, then the benefits are not taxable and the taxpayer probably does not need to file a federal income tax return. IRS – Publication 4696 (PR): VITA/TCE Puerto Rico Resource Guide

If the only income you received during the tax year was your Social Security or equivalent railroad retirement benefits, your benefits may not be taxable and you may not have to file a tax return. Your benefits won’t be taxable unless the sum of your modified adjusted gross income (MAGI) plus one half of your benefits received in the tax year is more than the base amount for your filing status. If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. IRS.gov Tax Topics IRS.gov Tax Topics

Example

A, an unmarried individual, receives $200 of interest income, $100 of dividend income and $7,000 of social security retirement benefits during the year 2007. Under section 86, no portion of A’s social security benefits is includible in A’s gross income for 2007. Because A’s gross income does not exceed the sum of the exemption amount plus the basic standard deduction applicable to an unmarried individual, A is not required by sections 6012 or 6017 to file an income tax return for 2007. Rev. Proc. 2008-21

Conclusion

Social Security benefits may be partially taxable if your combined income exceeds certain thresholds. The amount that is taxable depends on your total income and filing status. If Social Security is your only source of income, your benefits are generally not taxable. However, if you have other sources of income, up to 85% of your benefits may be subject to federal income tax.

To determine if your benefits are taxable, you can use the worksheet in the Instructions for Form 1040 or consult IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

Sources:

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