Can rental income reduce Social Security benefits?

No. Social Security only counts income from work towards the retirement earnings test. Income from other sources, such as rental properties, lawsuit payments, inheritances, pensions, investment dividends, IRA and 401(k) distributions, and interest — will not cause benefits to be reduced.

In 2026, Social Security will withhold $1 in benefits for every $2 earned above the annual limit of $24,480 for people who claimed benefits before reaching full retirement age, which is 66 and 10 months for people born in 1959 and 67 for people born in 1960 and later. Wages from a job, net earnings from self-employment, and work-related bonuses and awards count toward the limit. 

Keep in mind

• A different formula applies for the year in which a beneficiary will reach full retirement age — the earnings limit is $65,160 in 2026, and $1 in benefits is withheld for every $3 in income exceeding the cap. 
• The earnings test goes away once a beneficiary reaches full retirement age. From then on, income level has no effect on Social Security benefits.