Q & A
Ask Rusty – Is There Income Tax on Social Security Benefits?
Dear Rusty: The Trump Administration is saying that now there will be no taxes on Social Security benefits. Since we’re getting ready to start our 2025 income tax return, can you explain how this all works? Signed: Confused Taxpayer
Dear Confused Taxpayer: You are obviously referring to the so-called “one big, beautiful bill” and how that bill affects income tax on your Social Security benefits. And this is because of the publicity surrounding the so-called “one big, beautiful bill” (OBBB) enacted last year, which claims to “eliminate income tax on Social Security benefits.” Well, that bill did, yet technically didn’t, fully eliminate income tax on benefits.” Allow me to explain.
The OBBB does eliminate income tax on most SS benefits, but it does so in a somewhat unique way – by providing an additional $6,000 (per person) deduction to your federal taxable income as reported to the IRS. Thus, you will pay less total income tax when you file your taxes with the IRS because of that additional deduction to your taxable income. The extra deduction is available to those over age 65 and is meant to offset the income tax which will still be levied by the IRS on the SS benefits you received in 2025.
Essentially, the rules governing income tax on Social Security benefits have not changed. The IRS will still levy income tax on your SS benefits if your combined income from all sources (known as your “provisional income”) is over $32,000 as a married couple filing jointly, or more than $25,000 if you file as an individual. If your provisional income is below the threshold for your IRS filing status, you will pay no income tax on your received 2025 SS benefits. But if your provisional income exceeds the threshold for your IRS filing status, then somewhere between 50% and 85% of your received SS benefits will be taxed (how much SS income to be taxed depends on your combined income in 2025).
By now, you should have received form 1099-SSA which advised of your 2025 Social Security income, including any income tax you had withheld from your SS benefits. This income should be reported when submitting your 2025 income tax return. If your “provisional income” is over $32,000 as a married couple filing jointly (or over $25,000 as an individual filer), then your 2025 SS benefits will still be taxed by the IRS. But when completing your 2025 Income Tax Return, you will also be able to claim an additional $6,000 per person ($12,000 if you file jointly), which will likely offset any income tax you must pay due to the SS benefits you received in 2025. If you use a tax preparer (or tax preparation software), they will guide you through this calculation. Note, too, that the
$6,000 per person deduction amount will be less if your combined taxable income is more than $150,000 as a married couple (or more than $75,000 as a single filer).
Be aware, though, that the OBBB is temporary tax accommodation which expires after tax year 2028. And that’s because the process used to pass the bill in Congress (a “budget reconciliation” process) didn’t actually change SS law; rather it provided a way around it to offset income tax paid on SS benefits.
So, to recap, the IRS can still levy income tax on your received Social Security benefits but, because of the OBBB, you will likely also (depending on your provisional income level) receive an extra deduction which offsets any taxes calculated on your Social Security benefits.
Finally, be aware that if your first husband also predeceases you, you will then become eligible for a surviving ex-spouse benefit from him, even if he has remarried.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-dvisory) or email us at ssadvisor@amacfoundation.org. If you would like to speak with an advisor, call (888)750-2622.