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Social Security Benefits and Taxes

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When you’re receiving Social Security benefits, you may be subject to income tax on those benefits.  At the end of the year, you’ll receive a form SSA-1099 from the government that details the benefits that you’ve been paid, as well as the amount that has been deducted for Medicare premiums, and any federal income tax that you’ve had withheld from the benefit checks.

When you prepare your tax return for the year, if you’re using a software program (does anyone prepare them by hand any more?), the program will give you a place to enter the figures from your SSA-1099 form.  Then after you’ve entered all of your other income information into the system, it will calculate how much of your Social Security benefit is subject to income tax.

But that’s no fun, is it?  How do you know how much of your benefit is going to be taxable?

Here’s how it works: there is a figure known as provisional income, which is calculated using all of your other income (including tax-exempt interest) plus half of your Social Security income.  Your provisional income is then compared to a base amount, depending upon your filing status.

  • For filing status of Single, Head of Household, Qualifying Widow(er) with a Dependent Child, or Married Filing Separately (if you did not live with your spouse at any time in the year), the base amount is $25,000
  • Married Filing Jointly, the base amount is $32,000
  • Married Filing Separately (if the spouses lived together at any time during the year), the base amount is $0

If your provisional income is above the base amount for your filing status, your Social Security benefit at least a portion of your benefit is going to be taxable.  Up to 50% of your benefit may be taxable as ordinary income, until you reach the next base level.  If your provisional income is greater than the first base level but less than the next base level, at most 50% of the Social Security benefit will be taxable.  The next base levels are:

  • $34,000 (Single, Head of Household, etc.)
  • $44,000 (Married Filing Jointly)
  • $0 (Married Filing Separately)

When your provisional income is greater than the second base level, a portion of your Social Security benefit will become 85% taxable.  Upon reaching the second level, a portion of the benefit is 50% taxable and the amounts above the second level are 85% taxable.  As your income increases, eventually all of your Social Security benefits become 85% taxable.

If you want more detail on the calculations, you can look at this earlier article which works through the calculations for Social Security benefit taxation.  It gets pretty complicated, but it’s useful to know how it all works, in case you can change your income to make a difference in how the benefits are taxed.  This is also useful as you plan which types of income to recognize – if you can take Roth-type income versus regular IRA income,it can have a profound effect on the taxation of your Social Security benefits.  For more on how this works, see this article on Roth Conversions and Social Security benefits.


  1. Steve says:

    I exceeded the SS income limit last year and I have to pay back the excess benefit. I have the option to either write a check for the full amount of $3400 and send it to the government or let them reduce my monthly benefit for the next 3 months. Are the tax consequences the same for the 2 scenarios? Do I have to amend last years tax forms or is there a way to deal with this on this years taxes?

    1. clydewolf says:

      Your repayments of excess benefits received are subtracted from your gross benefits you receive. If the payback in 2020 is for excess benefits received in 2019, the payback is subtracted from your 2020 gross benefits. You do not need to amend the prior year return.
      See Repayment of Benefits, page 5 of IRS Pub 915, Social Security and Equivalent Railroad Retirement Benefits:

      1. jblankenship says:

        I agree with clydewolf on this, that’s exactly how it’s handled.

  2. clydewolf says:

    It is intresting to know the thresholds for the 50% taxing level were established in 1983 and have never been increased.
    The thresholds for the 85% level were established in 1993 and have never been increased.

    In the mean time the SS benefits are increased from time to time with a COLA. It may be soon where half of the SS benefit is taxed just because a threshold is breached with half of the SS benefit.

    1. jblankenship says:

      That’s always seemed odd to me as well, clydewolf. Everything else associated with ss is indexed, but those levels remain fixed, with more and more folks having to pay tax on a significant portion of their benefits…

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