Is Social Security Taxable in California?

by Rod Howell ; Updated July 27, 2017
California workers can continue to earn incomes and collect Social Security benefits simultaneously.

In 2009, 4.8 million Californians received $5.1 billion each month in Social Security Retirement, Survivors and Disability benefits. You receive Social Security payments if you meet the requirements of the three benefit programs. Your family members are also eligible to receive the same benefits you’re entitled to. Social Security benefits are not taxed at the state level in California. However, if you have other taxable incomes, your benefits could be subject to federal taxation.

Guidelines

If you're applying for Social Security benefits in California, some general requirements are the same for all three programs. Some include paying Social Security taxes and acquiring at least 40 work credits. You get a work credit for every $1,120 you make during the year. As of 2011, you can get a maximum of four work credits when you earn $4,480. However, the Disability and Survivors programs allow you to qualify with less if you were to become disabled or died before reaching the total.

Payment Amounts

Your Social Security benefit amounts are based on your history of earnings. Every year the Social Security Administration updates your benefit information and sends you a Social Security statement detailing how much you’re entitled to. Years with little to no income can be averaged in and decrease your benefit amounts. Your benefits are also affected if you get them earlier or later than normal. For example, you can receive retirement benefits before you reach your full retirement age, which is 66 if you were born after 1943 and 1959 and 67 after 1960. However, your benefits are reduced if you do get them before reaching retirement age. You can postpone them until after your retirement age and your amounts are increased.

Family Benefits

Social Security benefits are paid to your family members. The three programs distribute benefits to your dependent children until they’re 18 or 19 if they’re in secondary schools. Your spouse or ex-spouse has to be at least 62 years old. She can receive payments at an earlier age but her amounts are reduced. Your ex-spouse had to be married to you for 10 years, but the Survivors program waives this requirement if she’s caring for your children under 16. Family benefit amounts vary by program; retirement and disability payments amount to one-half of your full benefit rates while Survivors benefits are based on their ages. The total amounts your family receives in retirement and disability benefits are limited to 80 percent of your benefit rates and 180 percent of your Survivors rate. Your family benefits are not affected by your ex-spouse’s payments.

Taxation

Your Social Security benefits are taxed by the Internal Revenue Service if you have other taxable income such as work earnings, interests and dividends. For example, as of April 2011, if you have income totaling $25,000 or more per year, up to 50 percent of your Social Security benefits are taxed at normal income tax rates and up to 85 percent if your income tops $34,000. If you’re married and your combined incomes exceed $32,000 and $44,000 per year, the Internal Revenue Service taxes up to 50 and 85 percent of your Social Security benefits, respectively.

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