Are My Social Security Benefits Taxable?
If you’re asking this question, you’re not alone. Unfortunately, the answer isn’t a simple “yes” or “no.” Whether or not you’ll pay taxes on your Social Security benefits depends on a mix of factors, like your total income, filing status, and where you live. Some retirees are completely off the hook, while others find themselves writing checks to Uncle Sam each year.
Key Takeaways
Not all Social Security benefits are tax-free. Up to 85% of your Social Security benefits can be taxable, based on your income and filing status.
New deductions help, but not everyone qualifies: The 2025 senior deduction may lower taxable income, but retirees with other income sources often still owe.
Some states tax Social Security, too: A dozen states still levy their own taxes, adding another layer for retirees to plan around.
In this post, we’ll break down:
- Recent updates to Social Security taxation, including big changes from the new One Big Beautiful Bill Act (OBBBA)and the new senior deduction.
- How to know if you owe taxes, with a simple chart for income thresholds and a quick walkthrough on calculating your tax liability.
- Which states tax Social Security benefits and how much they take.
- Why the claim that “88% of seniors don’t pay” isn’t exactly true – and what you should really expect.
Let’s dive in.
Recent Updates to Social Security Taxes
The One Big Beautiful Bill (OBBBA) introduced some major changes aimed at seniors, including a new senior deduction designed to reduce taxable income for retirees. Here’s what’s new:
- New Senior Deduction. If you’re 65 or older, you may now qualify for an additional $6,000 deduction ($12,000 for joint filers who are both 65+) on top of the standard deduction for seniors, potentially lowering your taxable income and minimizing taxes owed on Social Security. This temporary deduction (2025 -2028) phases out if you’re modified adjusted gross income (MAGI) is over $75,000 ($150,00 for joint filers).
- Adjusted Income Thresholds. The bill updated income thresholds slightly to account for inflation, meaning some seniors may fall into a lower tax bracket for their benefits this year.
- Simplified Reporting. The bill also promises to make it easier to calculate what portion of your benefits is taxable – no more mind-bending IRS worksheets (well, almost).
These updates sound great, but they don’t automatically mean you’re off the hook, especially if you have other sources of income like pensions, investments, or part-time work.
How Do I Know If I Owe Taxes on Social Security Benefits?
Social Security benefits become taxable when your combined income (that’s your adjusted gross income (AGI) + nontaxable interest + half of your Social Security benefits) exceeds certain limits.
Here’s a quick look at the thresholds:
| Filing Status | Combined Income | Taxable Portion of Benefits |
|---|---|---|
| Single | $25,000 – $34,000 | Up to 50% |
| Single | Over $34,000 | Up to 85% |
| Married Filing Jointly | $32,000 – $44,000 | Up to 50% |
| Married Filing Jointly | Over $44,000 | Up to 85% |
How to Calculate Your Social Security Taxes
- Add up your other income (wages, pension, investments, etc.)
- Add nontaxable interest (if any)
- Add half of your Social Security benefits
- Compare this total to the table above
- Use IRS Form SSA-1099 and Publication 915 for the exact math – or better yet, have a tax pro run the numbers!
Do States Tax Social Security?
Federal taxes aren’t your only concern. Some states take a cut, too. Although the majority of states leave Social Security alone, the following states do tax benefits in some form.
- Colorado: Taxpayers between the ages of 55 and 64 are taxed based on their filing status and income (AGI) level. If you’re 65 or older, however, there is no tax on your Social Security benefits.
- Connecticut: Up to 25% of your Social Security benefits may be taxed if your AGI exceeds $75,000 (single) or $100,000 (joint).
- Minnesota: If your AGI exceeds the given threshold, you may receive a partial exclusion on your benefits or have the entire amount subject to tax.
- Montana: Follows the IRS rules for taxing Social Security benefits.
- New Mexico: If your AGI exceeds $100,000 (single) or $150,000 (joint), your benefits are taxed.
- Rhode Island: Once you reach full retirement age (66 or 67, depending on birthdate), you’ll only pay taxes on benefits if your income exceeds $104,200 (single) or $130,250 (joint).
- Utah: Offers a credit to offset taxes, but you’ll still likely pay if your AGI exceeds $45,000 (single) or $75,000 (joint).
- Vermont: Taxation is based on income and filing status. Partially taxed for those with an AGI between $50,000 and $60,000 (single) or $65,000 and $75,000 if filing jointly. Single filers with an AGI above $60,000 and joint filers over $75,000 are fully taxable.
- West Virginia: By 2026, Social Security will be fully exempt at the state level. For 2025, single filers with an AGI over $50,000 or joint filers over $100,000 pay taxes on 35% of their benefits.
The “88% Don’t Pay” Myth
The White House has claimed that 88% of seniors won’t pay taxes on Social Security benefits. Although that might technically be true if you only consider seniors whose sole income is Social Security, reality looks much different.
According to data from sources like the Center on Budget and Policy Priorities and SSA reports, many retirees rely on pensions, 401(k)s, IRAs, and part-time jobs to make ends meet. This extra income often pushes them past the “tax-free” threshold, meaning a large portion of seniors still owe taxes on at least part of their benefits.
Bottom line – Don’t assume you’re in the clear. Run the numbers or talk to a tax professional to know for sure.