Social Security benefits

Not all Social Security benefits are included in federal taxable income. The subtraction is allowed only for Social Security benefits that are included in the taxpayer’s federal taxable income. This is the amount on line 6b of the federal return, not the amount on line 6a. IRS Publication 915 provides a worksheet to help a taxpayer determine the amount of Social Security benefits that are taxable.

To determine the subtraction allowed for Social Security benefits in the case of a joint return, Social Security benefits included in federal taxable income must be apportioned in a ratio of the gross Social Security benefits of each taxpayer to the total gross Social Security benefits of both taxpayers. See the worksheet below to determine what part of each spouse’s benefits is included in their federal taxable income and therefore eligible for the pension and annuity subtraction.

For income tax years beginning January 1, 2022, and after, taxpayers age 65 or older at the end of the tax year may subtract the entire amount of Social Security benefit income included in the taxpayer’s federal taxable income.

For income tax years beginning January 1, 2025, and after, taxpayers age 55 to 64 at the end of the tax year may subtract the entire amount of Social Security benefit income included in their federal taxable income if their adjusted gross income does not exceed the following thresholds:

$75,000 if their filing status is single; or

$95,000 if their filing status is joint.

For those taxpayers whose adjusted gross income exceeds these thresholds, the cap remains at $20,000.

For tax years 2022 and later, the subtraction for Social Security benefits is claimed on a separate line of the Subtractions from Income Schedule (DR 104AD) . Any subtraction claimed for Social Security benefits will reduce the subtraction an individual can claim for any other pension and annuity income. Please see the Individual Income Tax Filing Booklet (DR 0104) for the applicable tax year for additional guidance in determining these limits.