Q: Are federal income taxes withheld from Social Security checks?
A: Income taxes are not routinely withheld from SSA checks but you can request that this be done. To have taxes withheld from your SSA monthly benefits, complete Internal Revenue Service (IRS) form W-4V, “Voluntary Withholding Request”available from IRS or download it at www.socialsecurity.gov/planners/taxwithold.htm. Within the choices of 7%, 10%, 15% or 25% of your monthly benefit, you select the percentage of benefit amount you want withheld. Mail the completed form to your local Social Security office.
Q: Will I have to pay income tax on my Social Security benefits?
A: Perhaps. Some people pay federal income taxes on their Social Security benefits but usually only if they have other substantial taxable income such as wages, self-employment, interest or dividends. Many people do not pay any tax on their Social Security benefits, some on up to 50 percent of benefits and some on up to 85 percent of benefits. No one pays federal income tax on more than 85 percent of his or her SSA benefits. See www.socialsecurity.gov/planners/taxes.htm. Social Security benefits became taxable in 1984 based on the SSA Amendments of 1983. Signed into law by President Reagan, these amendments made numerous changes to Social Security and Medicare to assist in funding them. The 1983 Amendments are summarized at www.socialsecurity.gov/history/1983amend.html
Did you know? Learn how and why the amount of wage or self-employment earnings taxable for Social Security has increased from 1937 until today. Read The Evolution of Social Security’s Taxable Maximum at www.ssa.gov/policy/docs/policybriefs/pb2011-02.html.