Are Social Security benefits taxed?
Sometimes. If your "combined income" is over $25,000 (single) or $32,000 (married filing jointly), up to 50% of your benefits can be taxed. Over $34,000 or $44,000, up to 85% can be. Because a public pension counts toward combined income, most retirees with a pension pay some federal tax on Social Security. A new $6,000 deduction for people 65 and older (2025 to 2028) can lower the tax.
Social Security benefits are never 100% taxable. At most, 85% of your benefits is added to your taxable income, and then taxed at your normal rate. Whether any of it is taxed depends on how much other income you have. Social Security sends you Form SSA-1099 showing the benefits you received for the year; box 5 is the figure the IRS worksheet starts from.
Step 1: figure your combined income
The IRS calls the measure "provisional income" in some places, and Social Security calls it combined income. Roughly, it is:
- half of your Social Security benefits for the year, plus
- all your other income that shows up on your tax return, including pensions, wages, taxable TSP, 457, 403(b) and IRA withdrawals, interest, dividends and capital gains, plus
- tax-exempt interest, such as interest from municipal bonds, minus
- certain adjustments to income listed on Schedule 1 of Form 1040.
This follows Worksheet 1 in IRS Publication 915: Social Security and Equivalent Railroad Retirement Benefits. Married couples filing jointly add both spouses' benefits and income together.
Step 2: compare it to the thresholds
| Combined income | Single | Married filing jointly |
|---|---|---|
| None of benefits taxable | $25,000 or less | $32,000 or less |
| Up to 50% taxable | $25,000 to $34,000 | $32,000 to $44,000 |
| Up to 85% taxable | Over $34,000 | Over $44,000 |
Source: IRS Publication 554: Tax Guide for Seniors. "Single" here also covers head of household, qualifying surviving spouse, and married filing separately if you lived apart from your spouse all year. If you are married, file separately and lived with your spouse at any time during the year, the base amount is $0, so up to 85% of your benefits is usually taxable.
"Up to" matters. Crossing $34,000 does not make 85% of all your benefits taxable at once. The worksheet phases it in: roughly 50 cents of benefits becomes taxable for each dollar of combined income in the first band, and 85 cents for each dollar in the second band, until 85% of your benefits is reached.
Why a pension usually pushes you over
Most public pensions are fully or mostly taxable, and the taxable part counts in full toward combined income. A modest pension on its own is often enough to pass the top threshold.
Robin is a made-up single retiree with a fully taxable public pension of $40,000 a year and Social Security of $24,000 a year ($2,000 a month). Robin has no other income. Following IRS Worksheet 1:
- Half of benefits: $12,000. Combined income: $40,000 + $12,000 = $52,000.
- Amount over $25,000: $27,000. Amount over $34,000: $18,000.
- First band: half of the smaller of $27,000 or $9,000 = $4,500 (capped at half of benefits, $12,000).
- Second band: 85% of $18,000 = $15,300.
- Total: $4,500 + $15,300 = $19,800. The cap is 85% of benefits, $20,400. So $19,800 of Robin's $24,000 in benefits is taxable.
Robin pays income tax on $19,800 of Social Security at Robin's normal rate, not a separate tax. Without the pension, none of Robin's benefits would be taxable.
Some things that can matter for public employees:
- Lump sums and big withdrawals. A large TSP withdrawal, an Oregon PERS IAP lump sum, or a Roth conversion in one year raises combined income for that year. That can make more of your benefits taxable and can also raise Medicare premiums two years later (see our IRMAA guide).
- Retroactive payments. If you got a lump-sum back payment of Social Security, for example after the Social Security Fairness Act raised your benefit, the taxable part generally counts in the year you received it. Publication 554 says you may be able to figure the part that belongs to earlier years separately if that lowers your tax.
The new senior deduction (2025 to 2028)
The 2025 federal tax law (often called the One, Big, Beautiful Bill) did not stop taxing Social Security. Instead, it created a new enhanced deduction for seniors (IRS: New enhanced deduction for seniors):
- $6,000 for each person 65 or older, or $12,000 for a married couple if both qualify.
- For tax years 2025 through 2028.
- It is in addition to the regular extra standard deduction for people 65 and older.
- It phases out for modified adjusted gross income over $75,000 ($150,000 for joint filers).
- You can claim it whether you itemize or take the standard deduction. Married people must file jointly to claim it, and each person claiming it needs a valid Social Security number. It is claimed on the new Schedule 1-A (IRS: Schedule 1-A).
Note what the deduction does and doesn't do. It lowers your taxable income, so you pay less tax overall. It does not change your combined income, so it doesn't change how much of your Social Security is counted as taxable.
In Robin's example, a 66-year-old Robin with a $40,000 pension would have income under $75,000 and could deduct the full $6,000.
Paying the tax: withholding and Form W-4V
Social Security does not withhold federal income tax unless you ask. If you expect to owe tax on your benefits, you can either make quarterly estimated payments or have tax withheld from each check. Social Security lets you withhold 7%, 10%, 12% or 22% of each monthly payment (SSA: Request to withhold taxes). You can:
- set it up in your my Social Security account under "Change tax withholding,"
- call 1-800-772-1213, or
- fill out IRS Form W-4V, Voluntary Withholding Request, and send it to your local Social Security office.
Another option is to raise the federal withholding on your pension instead, which you can change with your pension system (PERS, DRS, OPM and others).
State taxes: Oregon and Washington
State rules are separate from the federal ones.
- Oregon lets you subtract Social Security benefits that are taxed on your federal return, so Oregon does not tax them. The subtraction is listed under "Social Security benefits" in Oregon Publication OR-17. Pension income is generally taxable in Oregon, though OR-17 also lists a subtraction for some federal pension income and explains who qualifies.
- Washington does not currently have an individual income tax, so it doesn't tax Social Security or pensions (Washington Department of Revenue: Income tax). The department says a 9.9% tax on adjusted gross income over $1 million is set to begin in 2028.
If you live in another state, check that state's tax agency, because each state sets its own rules.
What to do next
- Run the worksheet. Use Worksheet 1 in IRS Publication 915 with your expected pension, Social Security and other income.
- Plan big withdrawals. If you are thinking about a large TSP, 457 or IAP withdrawal, see how it changes the taxable share of your benefits that year.
- Set up withholding. Choose withholding on Social Security (W-4V), on your pension, or both, so you don't owe a large bill in April.
- Ask a tax professional or an IRS-sponsored volunteer program for help with your own return.
Our planner adds up your pension and Social Security by start age, which is a good first step before estimating the tax.
See my retirement incomeCommon questions
At what income is Social Security not taxed?
If your combined income is $25,000 or less (single) or $32,000 or less (married filing jointly), none of your benefits is federally taxable.
Is Social Security taxed at 85%?
No. Up to 85% of your benefits can be counted as taxable income, and that portion is taxed at your normal income tax rate.
Did the 2025 tax law end taxes on Social Security?
No. It added a $6,000 deduction for each person 65 or older for 2025 through 2028. That lowers tax for many retirees, but the rules for taxing benefits did not change.
Does my pension count toward combined income?
Yes. The taxable part of a pension counts in full, which is why most retirees with a public pension have some taxable Social Security.
How do I have taxes taken out of Social Security?
Use your my Social Security account, call 1-800-772-1213, or send Form W-4V. You can choose 7%, 10%, 12% or 22%.
Does Oregon tax Social Security?
No. Oregon lets you subtract Social Security benefits that were taxed on your federal return. Pension income is generally taxable in Oregon.
General information, not advice. We aren't part of the IRS or the Social Security Administration. For your own return, ask a tax professional or see IRS Publication 915.