IRS Pub 915: Are Social Security Benefits Taxable?

Whether your Social Security benefits are subject to federal income tax depends on your total income and tax filing status. The Internal Revenue Service provides detailed guidance in Publication 915, “Social Security and Equivalent Railroad Retirement Benefits.” This publication outlines the rules and calculations to determine if a portion of your benefits must be reported as taxable income. The taxability of benefits is not based on your age or how long you have received them, but on a specific income formula that combines your benefits with other income sources.

Information Needed for the Taxability Calculation

To perform the calculation, you must first gather several financial documents. The most important document is your Form SSA-1099, the Social Security Benefit Statement, sent by the Social Security Administration (SSA) each January. The figure you will need is in Box 5, which shows your net benefits paid. If you have not received this form, you can access and print it by logging into your “my Social Security” account on the SSA’s website.

You will also need to collect documents for other income, including:

• Form W-2 if you had wages from a job
• Form 1099-INT for interest income
• Form 1099-DIV for dividends
• Form 1099-R for distributions from pensions or retirement plans

A specific type of income to locate is tax-exempt interest. This is interest you receive that is not subject to federal income tax, with a common source being municipal bonds. Even though this interest is tax-exempt, the IRS requires you to include it in the calculation for determining the taxability of your Social Security benefits. You can find this amount in Box 8 of your Form 1099-INT.

Calculating Your Combined Income

The next step is to calculate your “combined income,” a figure the IRS uses only for determining the taxability of Social Security benefits. This is sometimes called provisional income and is not found on any single tax form. The formula begins with your Adjusted Gross Income (AGI), which includes sources like wages and retirement distributions, but you must calculate it without including any Social Security benefits for this step. To this amount, you add any tax-exempt interest you received. The final step is to add one-half (50%) of the total Social Security benefits you received for the year from Box 5 of your SSA-1099.

To illustrate, consider a married couple filing a joint return. They have $40,000 in pension income and $2,000 in taxable interest from a savings account. Their AGI, excluding Social Security, is $42,000 ($40,000 + $2,000). They also have $1,000 in tax-exempt interest and received $30,000 in total Social Security benefits. To this, they add the $1,000 in tax-exempt interest and half of their Social Security benefits, which is $15,000. Their combined income for the year is $58,000 ($42,000 + $1,000 + $15,000).

Determining the Taxable Portion of Benefits

Once you have calculated your combined income, you can determine how much of your Social Security benefit is subject to tax. The taxable amount depends on where your combined income falls in relation to specific base amounts set by the IRS, which vary based on your filing status. These thresholds determine whether 0%, up to 50%, or up to 85% of your benefits are taxable.

For those who are married and file a joint return, if your combined income is $32,000 or less, none of your benefits are taxable. If your combined income is between $32,001 and $44,000, up to 50% of your benefits may be taxable. For combined income exceeding $44,000, up to 85% of your benefits may be subject to tax.

For individuals filing as single, head of household, or qualifying surviving spouse, the range is $25,000 to $34,000 for the 50% bracket. Amounts over $34,000 fall into the 85% bracket.

If your income falls into the 50% bracket, your taxable benefit amount is the lesser of two calculations: either 50% of your total Social Security benefits, or 50% of the amount by which your combined income exceeds the lower threshold. For example, a single filer with $20,000 in benefits and a combined income of $30,000 would have $2,500 in taxable benefits.

When combined income exceeds the highest threshold ($44,000 for joint filers or $34,000 for single filers), the calculation becomes more complex. The taxable amount is generally the lesser of 85% of your total benefits or a more detailed calculation involving 85% of the income above the upper threshold. IRS Publication 915 provides a detailed worksheet to walk through this specific calculation accurately.

Reporting Taxable Benefits and Managing Withholding

After determining the taxable portion of your Social Security benefits, you must report these figures on your federal income tax return. When using Form 1040 or Form 1040-SR, you will enter the total net benefit amount from Box 5 of your SSA-1099 on Line 6a. The taxable portion that you calculated is then entered on Line 6b and included in your total income.

To avoid a large tax bill when you file, you can choose to have federal income tax withheld directly from your monthly benefit payments. This is a voluntary action and is not automatic; you must proactively request it from the Social Security Administration.

To start withholding, you need to complete Form W-4V, Voluntary Withholding Request. On this form, you can choose to have 7%, 10%, 12%, or 22% of your total monthly benefit withheld for federal taxes. You must submit the completed form to the SSA, not the IRS, by mailing it to your local Social Security office.