Why More Retirees Are Paying Taxes on Social Security Benefits Than Ever
Nearly half of all retirees receiving Social Security now pay taxes on their benefits. These rules were introduced decades ago to support the program’s funding. Yet many remain unaware of how their income affects what they owe.
The thresholds for taxation have stayed the same since the 1980s and 1990s, leaving retirees facing higher bills as living costs rise.
The taxation of Social Security benefits began in the 1980s and expanded in the 1990s. Lawmakers designed the rules to keep the retirement system financially stable. Since then, the income limits triggering these taxes have never been adjusted for inflation.
Single filers may owe tax on up to 50% of their benefits once their provisional income hits $25,000. That share jumps to 85% at $34,000. For married couples filing jointly, the thresholds are $32,000 for 50% taxation and $44,000 for 85%. Provisional income includes half of Social Security payments, all taxable earnings, and some non-taxable sources.
A temporary $6,000 deduction for seniors aged 65 and older can reduce or eliminate the taxable portion of benefits. But this relief expires in 2028 unless Congress extends it. Meanwhile, former President Donald Trump had promised to end these taxes entirely but never followed through.
With no changes to the thresholds in sight, retirees must plan for potential tax bills in 2026 and beyond. Some will owe taxes for the first time, while others may see their share increase.
The rules on taxing Social Security benefits remain unchanged, despite rising costs over the years. Retirees should check their provisional income to estimate what they might owe. Without updates to the thresholds, more people will likely face these taxes in the future.
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