In 2026, some retirees will owe taxes on their Social Security benefits. This is true despite the fact that President Donald Trump pledged he would change the rules to eliminate taxes on them, and later said the majority of seniors wouldn't face taxes on their Social Security income.
So, how much money can you earn before you're taxed on your retirement checks?
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Understanding taxes on Social Security
It's helpful to know some details about how the taxation of benefits works. While Social Security benefits weren't taxable when the program was first created, lawmakers imposed taxes in the 1980s and 1990s to provide more financial stability to the retirement benefits program.
These taxes initially impacted a small percentage of higher-earning seniors but now affect close to half of all retirees collecting Social Security. The increased likelihood that you'll owe taxes needs to be taken into account during your retirement planning, as you can't use this money for other essentials.
The taxes are hitting more seniors because the threshold levels at which they kick in haven't changed since these Social Security reforms, which were passed decades ago, imposed the new tax for the first time. The thresholds aren't indexed to inflation, and lawmakers haven't moved to change them, so the amount you can earn before you're taxed hasn't gone up over time, even as wages have grown.
Under the current Social Security rules, the key factor that determines whether you owe taxes or not is provisional income. That's equal to:
- 1/2 of all Social Security benefits
- All taxable income
- Some non-taxable income, such as municipal bond interest
Some kinds of income, such as Roth IRA distributions, aren't counted when calculating provisional income. Therefore, if the bulk of your money is coming from Roth retirement plans, you may not need to worry about this issue. For others, though, it's critical to know exactly how much provisional income you have to determine if you'll lose some benefits to the IRS.
This is the exact amount you can earn before Social Security benefits become taxable
Now that you know how income is calculated, it's worth looking at the exact amount you can earn before you hit the threshold that triggers a tax on some of your benefits. Here's what the rules say for different kinds of tax filers:
- If you're a single tax filer, you'll be taxed on up to 50% of your benefits, once your provisional income is $25,000. If your provisional income hits $34,000 as a single filer, you'll be taxed on up to 85% of your benefits.
- If you're a married joint tax filer, you'll be taxed on up to 50% of your benefits once your provisional income is $32,000. If your provisional income hits $44,000, then you'll be taxed on up to 85% of your benefits.
These income levels have remained unchanged for decades and aren't likely to change in the near future. If your income goes up because you withdraw more from your 401(k) next year to adjust to rising costs, you'll potentially be taxed on more of your benefits or on benefits for the first time if your provisional income passes these thresholds.
It is true that there's a new $6,000 tax deduction for eligible seniors 65 or older who meet certain income requirements. This additional deduction is in effect from 2025 to 2028 and could lower your overall tax liability by reducing your taxable income. Indeed, it could offset some or all of any Social Security benefits you're required to include as income. Still, that deduction is temporary, and the general rules for taxing Social Security benefits remain unchanged, so you still need to know about these limits so you can plan accordingly if you may owe part of your benefits to the IRS.
