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Is Social Security Taxable?

Taxable Social Security

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Roger Wohlner
Updated November 10, 2022
3 Min Read

Social Security is a key retirement benefit for most people. Besides retirement benefits, Social Security offers disability benefits, survivor’s benefits and spousal benefits. In some cases Social Security benefits may be taxable. It's important to understand when and how Social Security can be taxed. 

How is Social Security taxed? 

Social Security benefits are taxed on the federal level based on your combined income. Combined income is calculated as: 

Adjusted gross income + tax-exempt interest earned + ½ of your Social Security benefits 

For those who file their taxes as single person, Social Security benefits may be taxed as follows: 

  • If your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxed.
  • If your combined income is greater than $34,000 up to 85% of your benefits may be taxed. 

For those who file their taxes as married and joint, Social Security benefits may be taxed as follows:

  • If your combined income is between $32,000 and $44,000 up to 50% of your benefits may be taxed.
  • If your combined income is greater than $44,000 up to 85% of your benefits may be taxed. 

Those who are married and file a separate return will likely pay taxes on their benefits according to the Social Security Administration

Other types of Social Security benefits generally follow these rules as well, but Supplemental Security Income (SSI) is an exception as these benefits are not taxable. 

In addition to federal taxes, 12 states tax Social Security benefits. 

Ways to avoid taxes on Social Security benefits 

Everyone’s situation is different. Keeping your income below the income thresholds outlined above will prevent your benefits from being taxed. This may or may not be feasible on its own for many people. Some strategies to reduce your income include: 

Roth accounts 

Money in a Roth IRA or Roth 401(k) is not taxed when withdrawn as long as certain rules are met including the five-year rule. Often a major source of taxable income for retirees are distributions from traditional IRAs or 401(k)s. In the case of a Roth IRA, this money is not subject to required minimum distributions (RMDs) which are often a sizable tax hit for many retirees. 

Withdrawals prior to claiming Social Security benefits 

Many people retire or semi-retire in their early 60s but may wait until their full retirement age (FRA) or even until age 70 to claim their benefits. It can make sense to withdraw funds from retirement accounts like an IRA or 401(k) prior to claiming SSA benefits when your income is lower and the tax bite may be lower. These withdrawals can reduce the level of future RMDs, which are often a major source of taxable income for retirees. 

Withdrawals can also be used to fund current income needs, they can be invested elsewhere for future needs in taxable accounts, or they can be used to do a Roth conversion. The latter provides the benefits of a Roth account during retirement including being exempt from RMDs in the case of Roth IRAs. 

Buy a QLAC 

A qualified longevity annuity contract or QLAC is a type of deferred annuity that can be purchased inside of a qualified retirement plan like a 401(k) or IRA. QLACs can provide income for life and are not subject to market volatility. 

As far as helping reduce taxes on Social Security, money used to purchase a QLAC is not subject to RMDs until the annuity begins to pay out which can be deferred as late as age 85. 


How much can a retired person earn without paying taxes? 

A retiree is subject to income taxes in the same way that anyone else is. Any income that is earned as well as income from investments, most pension plans and retirement account distributions are all subject to taxes. There may be exemptions from taxes for certain types of income, but otherwise any income earned or received by retirees are fully subject to taxes. 

What percentage of social security is taxable? 

Typically either none, 50% or 85% of a person’s Social Security benefit is taxable. This will depend upon several factors, including: 

  • The amount of your combined income
  • Your filing status
  • The type of benefit. Note: retirement, disability survivor’s and spousal benefits are generally taxable based on the formula discussed above. 

Do I have to pay state taxes on Social Security? 

Currently 12 states tax Social Security benefits in some form: 

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia 

Is Social Security taxed after age 66? 

Age does not make a difference as far as whether or not Social Security benefits are subject to taxes. The same rules apply regardless of your age. Whether or not any of your Social Security benefits are taxed is a function of your income and filing status. 

Do seniors pay taxes on Social Security income? 

Age does not play a role in whether or not a recipient of Social Security is subject to taxes on that income. They will be taxed on these benefits if their income warrants taxation. 

Does Social Security income count as income? 

Social Security benefits count as income if the recipient triggers the threshold for either 50% or 85% of their benefit to be subject to taxation.