If you’re a Pennsylvania resident and receive Social Security benefits, you may be wondering if that income is taxable.
The good news is that, for the most part, Social Security benefits are exempt from state taxes. However, there are a few exceptions to this rule, so it’s important to understand your tax obligations.
Is Social Security Taxable In PA? Social Security benefits are not taxable in Pennsylvania. However, the benefits may be taxable at the federal level, based on an individual’s income. So, you may have to pay federal income tax on Social Security payments with income from other sources, but they won’t have to pay state taxes.
In this post, we’ll explain whether Social Security benefits are taxable in PA and how you can file them at the federal level.
So, let’s get started!
Is Social Security Taxable In PA?
No, Pennsylvania doesn’t tax Social Security benefits. Social Security benefits are payments made to retired or disabled workers and their families. These benefits are funded by payroll taxes paid by workers and employers.
Pennsylvania exempts all Social Security income, as well as income from retirement accounts, like 401(k)s and IRAs. Pensions for seniors are also tax-free. However, social security income tax at the federal level is based on an individual’s income. Social Security benefits may be subject to federal income taxes, but Pennsylvania has no state income tax, so Social Security benefits are not taxable in the state.
Calculating Tax On Social Security Benefits In PA
Even though Social Security benefits are not subject to state taxes in Pennsylvania, you may still have to pay federal taxes on your benefits. For this reason, you’ll need to do a tax calculation on your benefits.
The amount of federal taxes you have to pay on your Social Security benefits will depend on your income and filing status. If you have other income sources (such as a job or investments), the tax rate on your Social Security benefits will be based on your total income.
Depending on your tax bracket, you will pay taxes on your Social Security benefits. If you have a combined income that is above a certain limit (the IRS calls this the base amount), you will have to pay tax on your benefits. Here are the IRS certain thresholds for 2022:
If you are single and your combined income is:
- With less than $25,000, you’ll not have to pay taxes on your social security benefits.
- Between $25,000 and $34,000, you’ll have to pay taxes on up to 50% of your benefits.
- $$34,000 or more, you’ll have to pay taxes on up to 85% of your benefits.
If you are married and filing jointly with your spouse, and your combined income is:
- With less than $32,000, you’ll not have to pay taxes on your social security benefits.
- Between $32,000 and $44,000, you’ll have to pay taxes on up to 50% of your benefits.
- $$44,000 or more, you’ll have to pay taxes on up to 85% of your benefits.
Note: The “Combined Income” is equal to AGI (Adjusted Gross Income) + nontaxable interest income (such as municipal bond income) + ½ of social security income.
Use IRS Form 1040 to calculate your social security taxes if your combined income exceeds a certain limit. On these forms, you’ll report your total Social Security benefits as well as any other income you received during the year. This is the form used for individual federal tax returns.
With the help of software and the worksheet provided by the IRS, you can determine your Social Security tax liability.
Once you’ve completed the worksheet, you’ll enter the taxable amount on your return. It’s important to note that these figures are for federal taxes only – as we mentioned before, Social Security benefits are not taxable in Pennsylvania.
How To File Social Security Benefits On Your Federal Tax Return
Although Social Security benefits are not taxed in Pennsylvania, you may still need to include them on your federal tax return. The amount of Social Security income that is taxable depends on your filing status and overall income. \
In the previous section, we explained how you can calculate your benefits based on your filing status and your combined income.
After you have calculated your total taxable income, you must report your Social Security benefits on your federal tax return. The form you’ll use to do this is the 1040 or 1040-SR. Report the taxable portion of your social security benefits on line 6b of Form 1040 (Individual Income Tax Return) or Form 1040-SR (an alternative U.S. Tax Return for Seniors – age 65 or older).
If you’re not sure how to file your Social Security taxes on your federal return, we recommend speaking with a tax professional or using tax software. This will ensure that you’re correctly calculating and reporting your taxable benefits.
State of Pennsylvania tax on social security benefits
As we mentioned before, there is no state tax on Social Security benefits in Pennsylvania. Therefore, you don’t have to pay state taxes on your benefits.
Conclusion
Now that you know the answer to the question, “Is Social Security taxable in PA?” Social Security income, as well as income from retirement accounts, like 401(k)s and IRAs, are exempt in Pennsylvania.
So if you live in Pennsylvania, you don’t have to pay any state taxes on your Social Security benefits. However, you may still need to include them on your federal tax return, depending on your filing status and overall income.
If you have any questions about how to file your Social Security taxes, we recommend speaking with a tax professional or using tax software. This will help you ensure that you’re correctly calculating and reporting your taxable benefits.