## Provisions Affecting Taxation of Benefits

- Office of the Chief Actuary
- Individual Provisions
-                 Current law taxation of Social Security 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:- Warshawsky 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 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:- Larson 2015
- Larson 2014                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 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:- Bipartisan Policy Center October 2016
- Bipartisan Policy Center June 2016                                                                                                                                                                                                    |
| 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:- Johnson 2016                                                                                                                                  |
| 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:- Larson, Blumenthal, Van Hollen September 2019
- Larson, Blumenthal, Van Hollen January 2019
- Larson 2017 |
|        | Summary list of all options in this category                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |