January 18, 2022

Four Things You Should Know About Social Security Tax

Tax season is upon us, with the IRS accepting tax returns beginning Jan. 24.

Here’s all the information you need to know about Social Security and tax.

Tens of millions of Americans receive Social Security benefits


Tens of Millions of Americans Receive Social Security Benefits

Are Social Security benefits taxable?

Yes, some households have to pay federal income tax on their social security benefits.

This usually happens if you have other substantial income in addition to your benefit, for example wages, self-employment income, interest, dividends or other taxable income.

However, Supplemental Security Income (SSI) is never taxable.

How much do you have to pay?

Not everyone pays the same amount in taxes on Social Security benefits, as it depends on one’s income.

If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you must pay federal income taxes on your Social Security benefits.

The portion of your distributions subject to tax depends on your income level, which we explain:

File a Federal Tax Return as an “Individual” and your income is:

  • Between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits.
  • Over $34,000, up to 85% of your benefits may be taxable.

Submit joint declaration, and you and your spouse have an income together that:

  • Between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits.
  • Over $44,000, up to 85% of your benefits may be taxable.

What is the Social Security form you need to file a tax return?

You can check whether your benefit has been taxed using your benefit statement or the SSA-1099 form.

This form is generally sent each January to people receiving Social Security benefits.

It shows the total amount of Social Security benefits you received in the previous year, so you know how much Social Security income you need to report to the IRS on your tax return.

Which States Don’t Tax Social Security?

Social Security benefits can be taxed at the state level, but not every state does.

Below is a list of the 37 states that do not tax Social Security benefits:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Nevada
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • south carolina
  • south dakota
  • Tennessee
  • Texas
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

if you happen to live in one of 13 states not on the list – you are probably wondering if you will have to deal with taxes.

Well, some states may levy taxes on your Social Security checks depending on your adjusted gross income.

For example, those living in Kansas are required to pay taxes on their distributions if their AGI is $75,000 or more.

You can check with your income department to see if you may owe taxes on your Social Security payments — if your state isn’t on the list above.

The sun explains how Social Security applicants can get an additional $841 per month in other benefits and tips on how to deal with inflation.

I’m A Tax Professional And Here’s How Parents Can Claim $8,000 From The IRS Next Year

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