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U.S. Social Security Benefit Taxation Thresholds Have Never Been Adjusted

Author: The Senior Citizens League(i) : Contact:

Published: 2019-12-03

Synopsis and Key Points:

Nearly 50% of retiree households report a portion of their Social Security benefits are now subject to taxation.

This is a tax that was estimated to affect just 10 percent of Social Security beneficiaries when it was first enacted in 1983.

At the time of enactment, The Congressional Quarterly referred to the revenue change as taxing benefits of high-income recipients...

Main Digest

Roughly one - half of all retiree households report that a portion of their Social Security benefits are subject to taxation, according to recent survey results from The Senior Citizens League (TSCL).

With 1.2 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association.

"This is a tax that was estimated to affect just 10 percent of Social Security beneficiaries when it was first enacted in 1983," says Mary Johnson, a Social Security and Medicare policy analyst for The Senior Citizens League.

"At the time of enactment, The Congressional Quarterly referred to this revenue change as 'taxing the benefits of high-income recipients'" says Johnson, citing the publication's summaries of major Social Security changes from 1983-1984. Social Security's archives state that "Congress intended that the taxation of benefits should not affect 'lower income' individuals."

The revenues from the tax on Social Security benefits are credited to the Social Security and Medicare trust funds and provide a growing share of the programs' financing.

But, unlike other parts of the tax code which are adjusted for inflation, such as income brackets, the income thresholds that subject a portion of Social Security benefits to taxation have never been adjusted.

"Today, the Social Security benefits of even modest-income retirees - those who have modified gross incomes of more than $25,000 (single filers) or $32,000 (joint filers) - are affected by the tax," Johnson says.

Had the income thresholds been adjusted for inflation the $25,000 threshold would be about $63,137 today and the $32,000 would be about $80,815, using the Bureau of Labor Statistics' inflation calculator.

New retirees can be caught off guard by the tax, and the Social Security Administration's information about it "can be easily misunderstood," Johnson notes.

Information about the tax on the Social Security Administration's website says that the tax affects retirees with "substantial income."

It states:

"Some of you have to pay federal income taxes on your Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return)."

To determine if a portion of the taxpayer's Social Security benefits are taxable, half of Social Security benefits are added to the adjusted gross income, plus any tax - exempt interest, and certain other tax - exempt income.

"Few people today think of an adjusted gross income of as little as $25,000 -$32,000 as 'substantial' income," Johnson says.

To calculate the taxable portion of benefits, taxpayers can find a worksheet in IRS publication 915.

Legislation is currently under consideration in the House, The Social Security 2100 Act (H.R. 860), that would adjust the income thresholds that subject Social Security benefits to taxation, from $25,000 to $50,000 for single filers and from $32,000 to $100,000 for joint filers.

According to a survey by The Senior Citizens League, 55 percent of survey participants support lifting the threshold for taxation of Social Security benefits to those levels, and only 12 percent oppose.

The bill would pay for this as well as providing a boost in Social Security benefits and a more generous cost-of-living adjustment, by increasing the amount of wages subject to payroll taxes and by very gradually increasing the tax rate that workers and employers pay.

To learn more, visit

(i)Source/Reference: The Senior Citizens League. Disabled World makes no warranties or representations in connection therewith. Content may have been edited for style, clarity or length.

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