Provisions Affecting Taxation of Benefits
These provisions revise the current rules for subjecting Social Security benefits to personal income tax. We provide a summary list of all options (printer-friendly PDF version) in this category. For each provision listed below, we provide an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2023 Trustees Report.
Choose the type of estimates (summary or detailed) from the list of provisions.
| Number | Table and graph selection |
|---|---|
| H2 |
Starting in 2024, tax Social Security benefits in a manner similar to
private pension income. Phase out the lower-income thresholds during 2024-2043.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for single
filers and $100,000 for joint filers starting in 2025. Taxation of benefits
revenues transferred to the Hospital Insurance (HI) Trust Fund would be the
same as if the current-law computation applied.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| H5 |
Beginning in 2030, for single/head-of-household/married-filing-separate taxpayers
with MAGI of $250,000 or more and joint filers with MAGI of $500,000 or more, include
up to the remaining 15 percent of Social Security benefits in taxable income (increased
from up to 85 percent of benefits taxable under current law). In subsequent years,
update these thresholds for growth in wages (AWI). Revenue from this provision would
be credited to the Social Security trust funds. Current law taxation of up to 85
percent of Social Security benefits would remain unchanged.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| H6 |
Eliminate federal income taxation of OASDI benefits that is credited to the
OASI and DI Trust Funds for 2054 and later. Phase out OASDI taxation of benefits
by increasing relevant "income" thresholds from 2045 through 2053 as follows,
for single/joint tax filers: (a) 2045 = $32,500/$65,000; (b) 2046 = $40,000/$80,000;
(c) 2047 = $47,500/$95,000; (d) 2048 = $55,000/$110,000; (e) 2049 = $62,500/$125,000;
(f) 2050 = $70,000/$140,000; (g) 2051 = $77,500/$155,000; (h) 2052 = $85,000/$170,000;
and (i) 2053 = $92,500/$185,000. Taxation of benefits revenues for the Hospital
Insurance (HI) Trust Fund would be maintained at the same level as if the current-law
computation applied.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| H7 |
Replace the current-law thresholds for federal income taxation of OASDI
benefits with a single set of thresholds at $50,000 for single filers and
$100,000 for joint filers for taxation of up to 85 percent of OASDI benefits,
effective for tax year 2025. These thresholds would be fixed and not indexed
to price inflation or average wage increase. Reallocate a portion of revenue
from taxation of OASDI benefits to the HI Trust Fund such that the HI Trust
Fund would be in the same position as if the current-law computation (in
the absence of this provision) applied. The net amount of revenue from
taxing OASDI benefits, after the allocation to HI, would be allocated to
the combined Social Security Trust Fund.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |