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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