Some Social Security income is taxable depending upon your filing status and other income. If Social Security is the only income that you receive during the tax year, then there is a good chance that the income is not taxable. If you receive other income, then you must determine whether your adjusted gross income exceeds the Internal Revenue Service limits. If you make enough income above and beyond your Social Security benefits, you may be taxed on a portion of it up to 85 percent.
Social Security Income Only
If the only income that you received during the fiscal year was Social Security income, then you do not file a federal tax return. Your Social Security income is below the baseline standard established by the IRS, and the entire income amount is not taxable. If you are married filing jointly and the only income that you or your spouse received was from Social Security, then the income is not taxable.
Modified Adjusted Gross Income
If you or your spouse received income from other sources in addition to your Social Security benefits, then Form 1040 can be used to determine your taxable income. According to IRS quick-step guidelines, you can add half of your Social Security income to your other income for the year, excluding tax-exempt interest, and compare that amount to the limits set by the IRS.
If your total modified adjusted gross income exceeds the thresholds, you must pay tax on the amount of income that is above the established limits. This is true whether your Social Security benefits are retirement benefits or disability benefits. Supplemental Security Income (SSI) is distinct from Social Security income; SSI is never taxable.
In 2020, single income tax filers who have an adjusted income between $25,000 and $34,000 may have to pay income tax on up to 50 percent of their Social Security benefits. For those who are married filing jointly and have an adjusted gross income between $32,000 and $44,000, they may be required to pay income tax on up to 50 percent of their benefits. If you're single and your AGI is more than $34,000 or married filing jointly with more than $44,000 in AGI, you can be taxed on up to 85 percent of your Social Security income. Visit IRS.gov to compare your income with the income limit tables.
Married Filing Separate Return
If you are married and file a separate return from your spouse, you are required to pay tax on your Social Security income. If you lived with your spouse for any portion of the year, then your Social Security benefits are taxable on your 1040 tax return. If you can prove that you did not live with your spouse any portion of the year, then your Social Security income is probably not taxable. In that case, consult a tax accountant to verify your filing status and taxable income.
Don't Include Child's Benefits
According to the IRS, Social Security pays benefits to children who are the natural, adopted or stepchild of a retired, disabled or deceased wage earner under Social Security Disability Insurance or Survivor’s Benefits. If the Social Security benefit check was made out in your name on behalf of your child, use only your portion to determine your taxable income.
Half of your child's Social Security income must be added to their other income to determine if their adjusted gross income is taxable. Their Social Security benefits should not be added to your income.
- IRS: Don’t Forget, Social Security Benefits may be Taxable
- Social Security Administration: Income Taxes And Your Social Security Benefit
- IRS: Regular & Disability Benefits
- Social Security Administration. "SUMMARY of P.L. 98-21, (H.R. 1900) Social Security Amendments of 1983-Signed on April 20, 1983." Accessed Feb. 27, 2020.
- Social Security Administration. "Benefits Planner | Income Taxes And Your Social Security Benefit." Accessed Feb. 27, 2020.
- Social Security Administration. "Replacement SSA-1099." Accessed Feb. 27, 2020.
- AARP. "Which states tax Social Security benefits?" Accessed Feb. 27, 2020.
- Federation of Tax Administrators. "State Tax Agencies." Accessed Feb. 27, 2020.
- Social Security Administration. "Monthly Statistical Snapshot, January 2020." Accessed Feb. 27, 2020.
- Internal Revenue Service. "Roth Comparison Chart." Accessed Feb. 27, 2020.
- Internal Revenue Service. "Early Retirement Distributions and Your Taxes." Accessed Feb. 27, 2020.
- Internal Revenue Service. "Retirement Plan and IRA Required Minimum Distributions FAQs." Accessed Feb. 27, 2020.
- Internal Revenue Service. "Instructions for Form 1098-Q," Pages 1-2. Accessed Feb. 27, 2020.
- Internal Revenue Service. "Instructions for Form 1098-Q," Page 1. Accessed Feb. 27, 2020.
- Internal Revenue Service. "Internal Revenue Bulletin: 2014-30." Accessed Feb. 27, 2020.
As curriculum developer and educator, Kristine Tucker has enjoyed the plethora of English assignments she's read (and graded!) over the years. Her experiences as vice-president of an energy consulting firm have given her the opportunity to explore business writing and HR. Tucker has a BA and holds Ohio teaching credentials.