Your Social Security Advisor

Income Tax on Social Security vs. the Earnings Test – Ask Rusty

family maximum social security-rusty-marry-girlfriend social security benefits benefit increase medicare benefits retireeDear Rusty: I retired from work this year (age 62) and I will receive my first social security benefits in September. Is there a special rule for the first year you retire that allows you to not pay taxes on your social security since you have earned no other income since you retired? Before I retired, I earned about $50,000, which I know is more than the usual allowed income.  Signed: Retired Senior

Dear Retired Senior: I’m afraid there is no such “first year” rule which exempts you from paying income tax on your Social Security benefits. When you file your Federal income taxes with the IRS you will need to claim your Social Security (SS) benefits as part of your income, and whether it is taxable will depend upon whether your “modified adjusted gross income” (MAGI) for the year exceeds $25,000 (if you file single) or $32,000 (if you file married-filing jointly). “MAGI” includes your taxable income from all sources (your “adjusted gross income” from your Federal income tax return), plus any tax-exempt interest you may have received, plus half of your annual Social Security benefits. If your MAGI exceeds the above levels, then up to 50% of your Social Security benefits will become a part of your taxable income; or if you exceed $34,000 (filing single) or $44,000 (filing married-jointly) then up to 85% of your annual SS benefits will become taxable. If you don’t exceed those levels your SS benefits aren’t taxable as income.

However, I suspect you may be confusing income tax on your Social Security benefits with another rule – Social Security’s “earnings test” which, if you have not yet reached your full retirement age, sets a limit on what you can earn without your benefit payments being affected. If you are collecting benefits before you have reached your full retirement age and you exceed the annual earnings limit ($17,640 for 2019) Social Security will withhold some of your benefits – $1 for every $2 you are over the limit. If that is what you’re referring to then, yes, there is a special rule for the first year you are collecting Social Security. That special first year rule says that if you claim benefits mid-year and you have not yet reached your full retirement age, you’ll be subject to a monthly earnings test for the remainder of that year, rather than the annual test. So, if your benefits start in September, provided you don’t earn more than $1470 in September or any month thereafter in 2019 you won’t lose any benefits. But if you do exceed that monthly limit, even by $1, you won’t be entitled to any SS benefits for that month. The monthly test is only in the calendar year you claim benefits – it goes away for you in 2020 and you’ll be subject to the annual earnings test only for next year.

Please note that the earnings limits are considerably more if you are claiming in the year you will reach your full retirement age. If this were the year you will reach your full retirement age, the annual limit would be $46,920 and the monthly limit would be $3910 (these limits change annually). However, if you stay fully retired and don’t return to work you will not need to worry about the Social Security earnings test but, depending on your “MAGI,” you may need to pay income taxes on your Social Security benefits.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website ( or email us at [email protected].



If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter
and Download the AMAC App

Sign Up Today Download

If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter!

Notify of
Oldest Most Voted
Inline Feedbacks
View all comments
Robert Lane
3 years ago

Hello – I have been hearing that there is a possibility I may qualify for more SS income. I am a Vietnam Veteran (70 – 72) and several people I served with claim that if I take my DD214 to SS I will get a larger SS check.

3 years ago
Reply to  Robert Lane

Your extra earnings are already applied most likely. You can certainly take your DD214 to SSA, I recommend making an appointment, but it’s unlikely that you’ll see any increase in your benefit.

Russell Gloor, AMAC Social Security Advisor
3 years ago
Reply to  Robert Lane

Robert, I have written a couple of articles about the so-called “special earnings for veterans.” If you send your email address to the contact email indicated at the end of this article (above), I’ll be happy to send you a link to those articles. Essentially the credits you speak of are dollar additions to your military earnings record, which were already automatically applied to your Social Security earnings history. They are not dollar additions to your monthly benefit amount.

Jennifer Sword
3 years ago
Reply to  Robert Lane

My husband passed in Sept
Diagnosed with cancer given 6 months to live.He was approved but had a waiting time of 5 months .He collected One check! The 5 month waiting. has shades of the veterans adm hoping the claimant would die before he could get anything
We both worked hard our entire lives, paid what was required Ss,Income tax contributed to charities,etc. I worked and retired from the USPS.i now have lost my life partner,have extensive ,my Bill’s are the same and I have lost 50% of my income.Usps is on the lower end of government pay,and the WEP and the G P O Offset puts me barely above poverty level! This is not exactly the American dream! The economy is ending the year the highest ever.Maybe for for some,but for me and other spouses who had to work to have a decent living.for their families our lives are shattered.Government takes from the lower earners I never earned salary I worked hourly and was middle class. They call bbn it double dipping,you can receive veterans retirement and SS and i,m sure other government retirees are able to receive both.My husband drew 1 check and I am eligible for “0”..We are trying to get other widows to unite for suits to correct this. 82% are women who are in this situation because of our incompetent politicians.

3 years ago

As seniors, we’ve already paid taxes on the social security income. Is there any politician out there that has No Income Tax on Social Security as an agenda ?

3 years ago
Reply to  Nelson

no there is not! you must elect those that will do the right thing!

Would love your thoughts, please comment.x