Social Security pays monthly benefits to individuals under several different programs, including retirement, disability insurance and Supplemental Security Income. If you receive benefits from Social Security, it may deduct a portion of your benefits to satisfy certain debts. Social Security may also withhold money from your check for taxes or insurance.
You may owe income tax on your Social Security benefits if you are a single filer and earn more than $25,000 per year or if you file jointly and earn more than $32,000 per year. If you owe tax on your benefits, you can ask Social Security to withhold 7 percent, 10 percent, 15 percent or 25 percent of your benefits each month for taxes. Because SSI is need-based government assistance, it isn't taxable.
If you participate in Medicare Part B or Part D, you must pay a monthly premium unless you qualify for low-income assistance. If you participate in Medicare Part B, Social Security typically deducts your monthly premiums from your check. If you participate in Medicare Part D, you can opt to have Social Security deduct your monthly premiums from your check or you can pay the premiums on your own.
Most Social Security benefits are subject to garnishment for certain types of debts, including alimony, child support, tax debt and other debts to the government. Your benefits may also be subject to garnishment for certain civil debts. However, other creditors can't typically take money from your Social Security checks even if they obtain a judgment, and SSI isn't subject to garnishment for any type of debt.
You can change your election to have taxes withheld from Social Security benefits using form W-4V. Though Social Security can withhold federal income taxes from your monthly checks, it doesn't have the authority to withhold state or local taxes. However, many states and local governments exempt Social Security benefits from taxation. Social Security may also withhold money from your monthly benefits if you owe money because of a previous benefit overpayment.
- Social Security Online: Withholding Income Tax from Your Social Security Benefits
- Social Security Online; Paying Income Tax on Social Security Benefits; July 2011
- Congressional Research Service; The Impact of Medicare Premiums on Social Security Beneficiaries; Alison Shelton; January 2010
- Social Security Online; Garnishing Social Security Benefits; May 2011