Effective Dates: 12/27/2023 - Present Previous | Next

TN 4 (12-23)

GN 05001.016 Determining Whether Benefits Are Includible in Taxable Income

A. Procedure

For tax purposes, a “social security benefit” is a monthly benefit under Title II. The benefits include retirement, survivor, and disability benefits. They do not include Supplement Security Income (SSI) payments, which are not taxable.

Taxpayers must include Social Security benefits in the gross income in an amount equal to the lesser of:

  • •

    One-half of the net Title II benefits received during the taxable year; or

  • •

    One-half of the sum derived by subtracting a “base amount” from the taxpayers “modified adjusted gross income” plus one-half of the Social Security benefits received.

B. Definitions

1. Base Amounts

The base amounts are:

  • •

    $32,000 for a couple filing a joint return;

  • •

    Zero for a married person filing a separate return who has not lived apart from their spouse during the entire year; and

  • •

    $25,000 in all other cases

2. Modified Adjusted Gross Income

The modified adjusted gross income is the adjusted gross income without considering Social Security benefits but adding in:

  • •

    tax exempt nontaxable interest;

  • •

    foreign earned income exclusions;

  • •

    foreign housing cost;

  • •

    income received from sources in Puerto Rico and certain possessions of the U.S.

EXAMPLE:

Adjusted gross income

+ Nontaxable interest

+ ½ of Social Security benefits

= Combined income

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0205001016
GN 05001.016 - Determining Whether Benefits Are Includible in Taxable Income - 12/27/2023
Batch run: 12/27/2023
Rev:12/27/2023