Social Security benefits are taxable regardless of age. The rules for taxing benefits do not change as a person gets older. Social Security benefits become taxable at any age when combined income reaches the federal limit.
Determining Taxable Amount
To determine if Social Security benefits are taxable, you’ll first need to calculate your total income. Generally, the formula for total income is: your adjusted gross income, plus nontaxable interest, plus half of your Social Security benefits. If married filing jointly, use combined incomes and benefits.
Tax Rates and Thresholds
Single filers with provisional income of $25,000 to $34,000 pay tax on up to 50% of benefits. Over $34,000, up to 85% is taxed. For joint filers, 50% is taxed on $32,000 to $44,000. Over $44,000, up to 85% is taxed. Once your income exceeds the 85% level, your marginal tax rate equals your federal bracket.
You can use your provisional income and base amount to determine the percentage of taxable benefits. For single, head of household, or qualifying widow(er): 50% is taxed if provisional income is $25,000 to $34,000. 85% if over $34,000. For married filing jointly: 50% taxed if provisional income is $32,000 to $44,000. 85% if over $44,000.
Retirees with little income besides Social Security may not be taxed or required to file. Those with gross income of at least $25,000 single or $32,000 joint will be taxed on 50% of benefits. Over $34,000 single or $44,000 joint will be taxed on 85%.
The Social Security tax is part of “FICA” taxes withheld from paychecks. In 2022, the total rate is 12.4% on a worker’s first $147,000 in wages, set annually by Congress. Whether your payments are taxed depends on income level – “provisional income” specifically. Age does not affect taxation of benefits.