Are Social Security Benefits Considered Gross Income?

by Linda Richard ; Updated July 27, 2017

Social Security retirement or survivor’s benefits as sole income are not taxable under the Internal Revenue Service regulations in 2010. Social Security benefits may be taxable income for those who have income from sources other than Social Security. The IRS requires special calculations for determining taxation of Social Security benefits.

History

Social Security reforms enacted in 1983 included provisions for taxation of up to 50 percent of Social Security benefits for recipients with income in addition to Social Security. The 1993 amendments added taxation of up to 85 percent of Social Security benefits for a class of high-earning recipients. The Social Security Administration reports that about one-third of recipients must pay income taxes on benefits.

Adjusted Gross Income

The IRS uses the adjusted gross income figure from Line 37 of Form 1040 as the basis for tax calculations, and many states use that figure for state income tax. The adjusted gross income figure does not include Social Security benefits, as the IRS does not consider Social Security benefits in the gross income figures. Do not count Social Security benefits in wages or gross income on Form 1040.

Combined Income

Combined income is a special calculation used to determine the amount of taxable Social Security benefits. Add the adjusted gross income figure from Line 37 of Form 1040 to nontaxable income shown on Line 8b of Form 1040. To that total, add 50 percent of Social Security benefits received for the year. The total Social Security benefits for the year should be on Form SSA-1099 mailed early each year by the Social Security Administration.

Calculations

Combined income above $25,000 determines taxation of Social Security benefits for single taxpayers. Single filers pay taxes on up to 50 percent of Social Security benefits if the combined income figure is between $25,000 and $34,000. Married filers pay taxes on up to 50 percent of Social Security benefits with a combined income figure between $32,000 and $44,000. Combined income calculations above $34,000 for single filers and $44,000 for those married filing jointly may see up to 85 percent of Social Security benefits taxed.

Place the total Social Security benefits received for the year in Line 20a of Form 1040. Use Line 20b for the taxable amount.

Warning

The IRS does not make it easy for a married person to file income taxes individually to avoid the taxation of Social Security benefits. Unless you did not live with your spouse during the tax year, you will likely pay taxes on Social Security benefits if you do not file a joint tax return.

About the Author

Linda Richard has been a legal writer and antiques appraiser for more than 25 years, and has been writing online for more than 12 years. Richard holds a bachelor's degree in English and business administration. She has operated a small business for more than 20 years. She and her husband enjoy remodeling old houses and are currently working on a 1970s home.

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