What You Should Know About Taxes on Social Security

Andy Markowitz and Deirdre Shesgreen,

Updated January 23, 2026

AARP

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En español

Published January 17, 2023

/ Updated January 23, 2026

One of the enduring myths about Social Security is that benefit payments are not subject to federal income taxes. This was true from the program’s inception in the 1930s until Congress overhauled its financing in the 1980s — but for more than 40 years now, some portion of Social Security income has been taxable for some beneficiaries.

Whether you are among them depends on your income. If you live on Social Security alone, it’s unlikely you bring in enough money for your benefits to be taxed. If you have other income sources, such as work or retirement account withdrawals, there’s a greater chance you’ll owe taxes on some of your benefits.

Even a newly enacted tax deduction for older Americans will not eliminate taxes on Social Security for retirees, although it could reduce tax bills for many. Here are nine things Social Security recipients should know about taxation of benefits this year.

1. Income matters — age doesn’t

Contrary to another common misperception, you don’t stop paying taxes on your Social Security when you reach a certain age. Income, and income alone, dictates whether you owe federal taxes on your benefits.

To make that determination, the IRS adds up your adjusted gross income (AGI), your tax-exempt interest income and half of your Social Security benefits for the year. If this figure, sometimes called your “combined” or “provisional” income, exceeds $25,000 for an individual taxpayer or $32,000 for a married couple filing jointly, a portion of your benefits is taxable.

Those minimum thresholds haven’t changed since the taxation of benefits was introduced. As incomes have risen in the decades since, so has the share of Social Security recipients whose benefits are taxed — from less than 10 percent in 1984 to nearly half in recent years, according to Social Security Administration (SSA) data.

2. You won’t be taxed on all your benefits

Under an overhaul of Social Security’s financing passed by Congress and signed by President Ronald Reagan in 1983, up to 50 percent of benefit income could be taxed if the recipient’s combined income exceeded the limits noted above. Budget legislation enacted a decade later under President Bill Clinton added a second, higher income threshold and made up to 85 percent of benefits taxable above it.

Here’s where it stands:

Combined income under $25,000 (single) or $32,000 (couple): Benefits are not taxed.
Combined income of $25,000 to $34,000 (single) or $32,000 to $44,000 (couple): Up to 50 percent of benefits can be taxed.
Combined income above $34,000 (single) or $44,000 (couple): Up to 85 percent of benefits can be taxed.

The “up to” is important. Simply landing in one of those higher income tiers doesn’t mean your benefits will be taxed to the maximum level; it’s more like a sliding scale. The IRS has an online tool you can use to figure out how much of your Social Security income is taxable.

Benefits are taxed the same way as other income — you pay the same rate on them as you would on, say, your work earnings.

3. You can have federal taxes withheld from benefits

If you expect to owe taxes on your benefits, you can effectively prepay part of the bill by having taxes withheld from your monthly Social Security payments.

You can opt in for withholding as part of your application for Social Security or do so later by filling out IRS Form W-4V and submitting it to a Social Security office. Another, more convenient option: With a My Social Security account, you can start, stop or change your withholding online. Whichever way you use, you can choose to have 7 percent, 10 percent, 12 percent or 22 percent of your benefits applied to your IRS bill.

4. It isn’t just retirement benefits

The taxation rules apply to all forms of benefits paid out of Social Security’s trust funds — retirement benefits, family benefits, survivor benefits and Social Security Disability Insurance (SSDI). Whichever type of payment you’re getting, you could owe taxes on it, depending on your overall income.

They do not apply to Supplemental Security Income (SSI), a separate benefit program that is administered by the SSA but paid out of general U.S. Treasury funds. SSI payments support people with very low incomes and limited financial assets who are 65 or older, blind or have a disability, and they are exempt from taxation.

5. Taxes on benefits help pay benefits

By law, federal income taxes collected on benefits go into the government’s Social Security and Medicare trust funds, thereby contributing to future benefit payments.

In 2024, income taxes on benefits added $55.1 billion to the Social Security trust funds, accounting for about 3.9 percent of Social Security’s revenue — the vast majority of which comes from payroll taxes levied separately on most U.S. workers’ earnings.

6. A new deduction could lower beneficiaries’ tax bills

A new tax break for people age 65 and older could reduce or fully offset taxes on Social Security income for millions of older Americans in 2026 and (for a few years) beyond. This bonus deduction, part of the 2025 tax and spending legislation known as the “One Big Beautiful Bill,” will reduce taxable income by up to $6,000 for eligible taxpayers.

The provision applies to people who were at least 65 at the end of 2025. Individual filers with a modified adjusted gross income (MAGI) up to $75,000 can deduct the full $6,000; spouses filing jointly with a combined MAGI of up to $150,000 can deduct $12,000 if both spouses qualify. Taxpayers with incomes above those levels but below $175,000 (single filer) or $250,000 (couple) can claim a reduced deduction.

If the bonus deduction pushes your income below one of the thresholds listed in section 2, it could reduce or eliminate the tax liability on your Social Security payments. It could also lower your overall tax bill by pushing you into a lower tax bracket.

The tax break is temporary, though — it expires after the 2028 tax year.

7. A 2025 law could complicate taxes for some beneficiaries

Congress passed the Social Security Fairness Act, which repealed two provisions that reduced or eliminated Social Security benefits for certain Americans who qualified for both Social Security and a pension, at the end of 2024; it was signed into law in January 2025.

The repealed statutes — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — affected about 3 million beneficiaries, most of them former employees of state and local government agencies that do not participate in the Social Security system, including many teachers, police officers and firefighters.

Beneficiaries who received reduced payments in 2024 due to the WEP or GPO recouped that money in 2025 via lump-sum payments from the SSA. Because these payments count as 2025 income, they could push some beneficiaries into a higher tax bracket or increase the amount of their taxable Social Security income for the year.

There is a workaround for those affected: They can reduce their tax liability through a lump-sum election, an IRS option for reporting retroactive benefit payments. As detailed in IRS Publication 915, the taxable portion of the retroactive payment can be allocated to the years the benefits were originally owed, rather than treating the lump-sum payment as income in 2025.

“If your income was more in 2025 [than in 2024], it would definitely benefit you to make that election,” says Lisa Greene-Lewis, a certified public accountant and tax expert with TurboTax.

If you need help navigating this option or other tax issues, AARP Foundation Tax-Aide offers free tax-prep services from IRS-certified volunteers. The program is open to all but focuses on people 50 and older with low-to-moderate income. You can use the foundation’s Tax-Aide locator tool to find a site near you.

8. Some states tax Social Security, too

Most states do not tax Social Security benefits, but a few do. For the 2025 tax year, if you live in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont or West Virginia, some portion of your benefits may be subject to state income taxes, under widely varying rules and formulas. That money goes into the states’ general funds.

Most of these states use different criteria than the federal government for taxing Social Security payments, setting higher income thresholds, offering various deductions or otherwise limiting taxation of benefits in ways that exempt many beneficiaries.

In Vermont, for example, Social Security income is fully deductible for residents with AGIs below $50,000 for an individual and $65,000 for a couple. In New Mexico, the thresholds are $100,000 and $150,000, respectively.

AARP has supported legislative efforts in multiple states to reduce or eliminate taxation of Social Security benefits. Kansas, Missouri and Nebraska stopped taxing benefits in 2024, and West Virginia will do so in 2026. To find out how benefits and other forms of retirement income are taxed in your state, check with its tax or revenue office.

9. COLAs can have an impact

Income from Social Security benefits is factored into the tax calculation, and that income is getting a modest bump this year due to inflation. The 2.8 percent cost-of-living adjustment (COLA) will increase the average retired worker’s Social Security income by about $672 for 2026. The 2025 COLA of 2.5 percent added about $588 to the average retired worker’s benefit last year.

While Social Security payments are adjusted annually for inflation, the income tiers for taxing them are not. The COLA can push some Social Security recipients over the threshold for owing taxes on their benefits and potentially increase the bill for those who were already over the threshold, especially in the midst of persistent inflation.

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Andy Markowitz is an AARP senior writer and editor covering Social Security and retirement. He is a former editor of the Prague Post and Baltimore City Paper.

Deirdre Shesgreen is an AARP writer and editor covering Social Security. She previously worked as a state news editor for the AARP Bulletin and as a reporter and editor at USA Today, the St. Louis Post-Dispatch and other publications.