From 24/7 Wall St. · Maurie Backman · · 1m 20s
Social Security Tax Threshold Stuck Since 1984
A $25,000 Social Security tax line unchanged since 1984 could tax your benefits if you have a $12,000 pension.
In brief
A $25,000 Social Security tax line unchanged since 1984 could tax your benefits if you have a $12,000 pension. Social Security benefits may become taxable for retirees with a $12,000 pension and $2,170 monthly Social Security checks. Originally reported by 24/7 Wall St..
Social Security Tax Threshold Stuck Since 1984
Congress set a tax trigger for Social Security benefits when Reagan was president and never adjusted it.
The $25,000 Provisional Income Threshold
A single tax filer’s provisional income of $25,000 means a portion of Social Security benefits can be taxable.
Provisional Income Formula
Provisional income is calculated as adjusted gross income, tax-exempt interest income, and 50% of annual Social Security benefits.
Social Security Benefits Grow Without Inflation Adjustments
Social Security benefits have increased through the years without inflation adjustments to the tax threshold.
2026 Cost of Living Adjustment
Social Security benefits receive a 3.6% cost-of-living adjustment in 2026, raising the average monthly benefit to $2,170.
Pension and Benefits Cross Tax Threshold
A $12,000 pension plus the average 2027 Social Security benefit pushes a single tax filer above the $25,000 provisional income mark.
Temporary Tax Deduction Expires in 2028
A $6,000 deduction that exempts Social Security benefits from taxes expires in 2028.
What matters most
Social Security benefits may become taxable for retirees with a $12,000 pension and $2,170 monthly Social Security checks.
