If you receive spousal Social Security benefits they may be subject to federal income tax, depending on your total household income for the year. As of 2019, most people who receive Social Security benefits pay income tax on some portion of them.

To determine whether or not you owe tax, you first have to calculate your total income base and then add half of your annual Social Security benefit to that figure. The tax on your Social Security spousal benefits is in addition to any tax you owe on other income, such as wages from employment, the interest or dividends you earned on investments, and distributions you received from a traditional 401(k) plan or individual retirement account (IRA).

Key Takeaways

  • Social security income can be paid to spouses of eligible applicants, with a reduced benefit amount.
  • Spousal Social Security benefits may be subject to federal income tax, depending on your household income.
  • Some states also tax Social Security benefits.
  • If you are married and file taxes jointly, you have to include your spouse's income in your calculations, even if they aren't receiving Social Security benefits themselves.

Individual Income Threshold

It's possible to collect spousal benefits based on the Social Security work record of an ex-spouse, as long as you haven't remarried and satisfy certain other requirements. In this case, you would check the box for "Single" filing status on your Form 1040 income tax return, and your benefits would be taxed as follows, based on your total income:

  • If your total income is less than $25,000, you would pay no tax on your Social Security benefits.
  • If your total income is between $25,000 and $34,000, up to 50% of your benefits would be subject to tax.
  • If your income is over $34,000, you could be taxed on up to 85% of your benefits.

Married Income Threshold

If you are married and filing jointly, you have to include your spouse’s total income in your calculations—even if your spouse has deferred collecting their own Social Security benefits in order to accrue delayed retirement credits. In this instance, here is how your benefits would be taxed:

  • If your combined taxable income is less than $32,000, you won't have to pay taxes on your spousal benefits.
  • If your income is between $32,000 and $44,000, you could have to pay taxes on up to 50% of your benefits.
  • If your household income is greater than $44,000, up to 85% of your benefits may be taxed.

If you are married and file separately, you will likely have to pay taxes on a portion of your benefits.

State Taxes on Social Security Benefits

As of 2019, these 13 states tax Social Security benefits to some degree:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

Bear in mind that whether a particular state taxes Social Security benefits can change over time. For example, West Virginia is abolishing its tax on Social Security benefits, beginning with the 2021 tax year. You can check the website for your state tax department to see its current rules.