The short answer
Social Security does not withhold federal income tax unless you request it. You can ask for 7, 10, 12 or 22 percent of each monthly payment to be withheld, and you cannot choose a flat dollar amount. You can start, change or stop withholding online in your my Social Security account, or by completing IRS Form W-4V and giving it to Social Security at a local office or by mail. The choice stays in effect until you change it. Withholding is paid to the IRS on your behalf and appears on Form SSA-1099 in the following January, and it counts as tax you have paid when you file. Social Security withholds only federal tax, so state tax and any tax on other income needs a separate plan. If you owe tax in several quarters, estimated tax payments are the alternative.
Why withholding is a choice
Up to 85 percent of Social Security benefits can be taxable, depending on your other income and your filing status. Nothing is withheld by default, so a retiree who has not set it up can owe the full tax in April. A balance due is not a penalty in itself, but a shortfall during the year can bring an underpayment penalty, and a large bill is a cash-flow shock for someone on a fixed income. Our guide to whether Social Security is taxable explains who owes and how much, and our guide to how much Social Security you will get explains how the benefit itself is figured. The retirement calculator estimates the monthly amount a rate would be applied to.
Withholding spreads the tax across the year, the way an employer does for wages, and it is the simplest approach for someone who does not want to track quarterly deadlines. If you are not sure you will owe, a modest rate costs little: anything withheld that you do not owe comes back as a refund.
Who can ask for it
Withholding is available on Social Security retirement, survivors and disability benefits. Each person who receives a benefit makes their own request, so a married couple makes two. Supplemental Security Income is not taxable, so it has no withholding option.
The four rates
Social Security accepts only four percentages, applied to each monthly payment. A flat dollar amount is not allowed.
Swipe sideways to see the whole table.
| Rate | On a $1,500 benefit | On a $2,000 benefit | On a $2,500 benefit |
|---|---|---|---|
| 7 percent | $105 | $140 | $175 |
| 10 percent | $150 | $200 | $250 |
| 12 percent | $180 | $240 | $300 |
| 22 percent | $330 | $440 | $550 |
The right rate depends on the tax you expect to owe, which depends on your other income. A retiree who has little other income may owe nothing and need no withholding. Someone with a pension, retirement account withdrawals or part-time work may owe on up to 85 percent of the benefit and want a higher rate.
How to start, change or stop it
- Pick the rate using the section below. If you are not sure, 10 percent is a common starting point, and you can adjust it later.
- Use your my Social Security account. You can sign in or create an account at ssa.gov and start, change or stop withholding online.
- Or use Form W-4V. Download it from irs.gov or call the IRS at 1-800-829-3676 for a copy. Fill in your name, Social Security number and the rate you want, and sign it. The form is not valid unless you sign it.
- Give the form to Social Security, not to the IRS. Mail it to your local Social Security office or bring it in. You can also call 1-800-772-1213 with questions.
- Check your payment. The change can take a few weeks to appear. Your next deposit will be smaller by the amount withheld.
To change the rate or stop withholding, repeat the process: a new request in your account or a new Form W-4V. The choice stays in effect until you change it or the payments end, so review it each year when your income changes.
A retiree who expects to owe about $2,400 in federal tax after counting a pension and retirement account withdrawals can match that with a rate. Ten percent of a $2,000 monthly benefit is $200 a month, or $2,400 a year, which is about what the tax comes to. If the estimate is off by a few hundred dollars either way, the retiree owes or receives a small amount at filing time, and the rate can be changed for the next year.
Choosing a rate
Estimate your tax for the year with last year's return as a guide. Add up your Social Security, pension, interest and any withdrawals, apply the standard deduction, and see what the tax on the remainder would be. The IRS Tax Withholding Estimator on irs.gov does the arithmetic, and a tax preparer can do it in minutes. Pick the rate whose yearly total is closest to the tax you expect to owe.
Err on the side of a slightly higher rate in the first year, when you have the least information. A refund is easier to live with than a bill, and you can lower the rate in the second year once your Form SSA-1099 and return show what happened.
A check partway through the year
Withholding is easy to forget, so look at it once a year, ideally in the fall. Compare what has been withheld so far with the tax you now expect to owe. If you took a large retirement withdrawal, sold something at a gain or started part-time work, your tax may be higher than you first estimated. A change made in October still withholds from the last months of the year, and the IRS treats withholding as paid evenly through the year, which can help avoid an underpayment penalty.
Reading Form SSA-1099
Every January Social Security sends Form SSA-1099, and you can also get it from your my Social Security account. Box 3 shows the benefits paid, Box 4 any benefits you repaid and Box 5 the net total, which is the figure that goes on your tax return. Box 6 shows the voluntary federal income tax that was withheld. Add Box 6 to the withholding from your other income and you have the tax already paid before you file.
When withholding is not enough
Social Security withholds only federal income tax. It does not handle state tax, though most states do not tax Social Security benefits at all and a few do. It also cannot cover tax on other income, such as a retirement account withdrawal or a side job.
If your other income produces a tax bill, you have three options: ask the payer to withhold, using Form W-4P for a pension or an annuity or Form W-4 for a job, or make estimated tax payments with Form 1040-ES. Payments are due in April, June, September and January. Paying at least 90 percent of the current year's tax, or 100 percent of last year's, generally avoids an underpayment penalty, with a higher figure for high earners. Our guide to taxes at 65 and older covers the extra deduction that may lower the bill. If the bill is a surprise even after all that, a tax preparer can look at the whole picture, including whether the right amount is being withheld from each source.
Questions about withholding
Can I withhold a flat dollar amount instead of a percentage?
No. Social Security accepts only 7, 10, 12 or 22 percent of each payment. For a precise dollar amount, ask another payer to withhold or make estimated tax payments.
Does withholding reduce my Social Security benefit?
No. Your benefit amount stays the same. Withholding only changes the deposit, and the amount withheld counts as tax you have paid when you file your return.
Do both spouses have to make a request?
Yes. Each person who receives a benefit makes a separate request for their own payment, in their own my Social Security account or on their own Form W-4V.
Is it too late to start in the middle of the year?
No. You can start at any time. Tax withheld later in the year counts as if it had been withheld evenly, so a late start helps with an underpayment penalty.
What this does not decide
Whether you owe tax, and how much, depends on your whole return. This is general information and not tax advice. A tax professional or a free tax clinic can estimate your bill and help pick a rate.
Official sources
Before the next payment
Write down your expected income for the year, pick a rate and make the request this week, since a change takes a few weeks to show up. If you apply for benefits soon, you can request withholding on the application, so read how to apply for retirement benefits first.
