This article discusses how Social Security Income is treated for tax purposes.
What is Social Security Income?
There is no age where social security is no longer taxable at the federal level
There are different types of Social Security Benefits. The type of benefit determines if the benefit is subject to tax.
Supplemental Security Income (SSI) – Provides benefits to adults and children with disability or blindness, that are below a specific financial limits or to individuals over 64 without disabilities who meet the financial qualifications.
*SSI is not taxable income, does not receive a tax form, and is not reported on a tax returnSocial Security Disability Insurance (SSDI) – Provides assistance to individuals who are disabled and meet other certain requirements specific to SSDI.
*SSDI is not taxable income, does not receive a tax form, and is not reported on a tax returnSocial Security Retirement Benefits (SSA) – Provides benefits based on how much a taxpayer paid in Social Security taxes through their work and replaces part of the taxpayer’s income when the taxpayer reduces hours or retires.
*SSA could become taxable income, is reported on Form SSA-1099, and should ALWAYS be reported on a tax return
How to View The Taxable Portion of SSA-1099 Benefits in a Tax Return
To determine the taxable portion of Social Security enter Form SSA-1099 and all other items on the taxpayer’s return.
View the taxable portion of benefits on the Tax Summary Page or 1040, Line 6b.
You can view an in-depth calculation of the taxable amount of Social Security by selecting Worksheets from 1040, Line 6b.
How Is the Taxable Portion of Social Security Calculated?
To calculate the taxable portion of Social Security use the following instructions:
Calculate Provisional Income for all Filing Statuses except MFS and living with spouse during the year
Income + 1/2 social security.
Compare Provisional Income to the IRS wage table below.
Filing Status | Provisional Income Amount | Taxable Amount |
Single filing statuses/MFS living apart from spouse for the entire tax year | <$25,000 | 0 |
>$25,000 but <$34,000 | Up to 50% | |
>$34,000 | Up to 85% | |
MFJ or QSS | <$32,000 | 0 |
>$32,000 but <$44,000 | Up to 50% | |
>$44,000 | Up to 85% |
If the taxpayer’s Provisional Income exceeds the amount for their Filing Status, their income can be taxed up to the amount listed in the chart.
Keep in mind that there are varying factors from return to return and it is up to the percentages listed in the chart. For example, if the taxpayer falls in the Provisional Income rate for 50% they may be taxed up to 50%, not necessarily the full 50%.
If MFS and living with the spouse the entire year, all of your social security is subject to tax regardless of the provisional income amounts.