Many retirees ask, “Is Social Security taxed?”
The answer is: yes, in many cases a portion of your Social Security benefits can be subject to federal income tax. But not everyone pays tax on their benefits.
How much is taxed depends on your total income and filing status.
In 2025 the rules remain largely similar to prior years, with some additional tax changes for seniors that may affect your bottom line.
How does the IRS decide if your Social Security benefits are taxable?
The IRS uses a formula based on your combined income.
Combined income is your adjusted gross income (AGI) + nontaxable interest + ½ of your Social Security benefits.
Once you compute that combined income, the IRS compares it to thresholds:
- If combined income is under $25,000 (single) or $32,000 (married filing jointly), your Social Security benefits are not taxed at all.
- If combined income falls between $25,000 and $34,000 (single) or between $32,000 and $44,000 (joint), up to 50 % of your benefits may be taxed.
- If combined income exceeds $34,000 (single) or $44,000 (joint), up to 85 % of your benefits may be taxed.
You report the taxable portion on Line 6b of Form 1040.
Will the new 2025 tax law fully exempt Social Security benefits from tax?
No. The recent “One Big Beautiful Bill Act” (2025) includes a new deduction for seniors (those 65 and older) of up to $6,000 that helps reduce taxable income.
However, the law does not eliminate the taxation of Social Security benefits alone.
The deduction is applied broadly to income, which may reduce how much of your Social Security gets taxed, but it is not a direct exemption of benefits.
What is “combined income” and why is it important?
Combined income determines how much of your Social Security benefits may be taxed. Again:
Combined income = AGI + nontaxable interest + ½ of Social Security benefits.
If your other income is low, your combined income stays under the first threshold, and your benefits remain tax-free.
If you have significant pensions, investment income, or other earnings, your combined income may push you into a zone where 50 % or 85 % of your benefits become taxable.
What income sources count toward taxation of Social Security?
Besides Social Security itself, the following income sources affect taxation:
- Pensions, wages, self-employment income
- Interest, dividends, capital gains
- Taxable IRAs or distributions
- Other income included in AGI
Also, nontaxable interest is added fully into combined income. This means bonds or other exempt interest affect how much your Social Security is taxed.
Can you ask for tax withholding on Social Security benefits?
Yes. To avoid owing tax at year’s end, you can ask Social Security to withhold income tax from your benefit payments by submitting Form W-4V.
You choose withholding rates of 7 %, 10 %, 12 %, or 22 %.
This helps spread your tax burden across the year rather than a large bill at tax time.
Are Social Security benefits taxed by states too?
That depends on your state.
Many states do not tax Social Security benefits at all. Others tax them based on state rules. Some states allow deductions or exemptions for retirees.
If your state does tax Social Security, they typically use your federal taxation rules as a base but may apply their own thresholds or exemptions.
What else changed in 2025 that affects Social Security taxation?
- The extra deduction for seniors (age 65+) up to $6,000 helps lower taxable income.
- Because of this, some seniors who previously had part of their Social Security taxed may now fall under thresholds or reduce their taxable portion.
- The deduction phases out for higher incomes (over $75,000 single / $150,000 married).
- Despite media confusion, Social Security benefits are still taxed under current law; the deduction alleviates but does not eliminate taxation for all.
