"Most retirees receive 12 months of Social Security income during calendar year 2025, with payments arriving between January 2025 and January 2026. Social Security benefits are taxed based on when you receive them, not when they're earned. If you received a payment in early January 2026, that money counts toward your 2026 tax return. However, beneficiaries who received payments in late December 2025 saw those amounts increase their 2025 taxable income."
"The IRS uses "provisional income" to determine Social Security taxation-a calculation that adds your adjusted gross income, tax-exempt interest, and half your benefits. Single filers face their first tax hurdle at $25,000 in provisional income, where up to half of benefits become taxable. The structure creates a cliff effect where a small income increase can suddenly trigger taxation on thousands of dollars in benefits. Married couples filing jointly get slightly more breathing room with a $32,000 threshold, but the same cliff effect applies."
Social Security pays benefits the month after they are earned, so a January 2026 payment represents a December 2025 benefit. Benefits are taxed based on the date of receipt, so payments received in late December 2025 count toward 2025 taxable income. The IRS calculates provisional income by adding adjusted gross income, tax-exempt interest, and half of Social Security benefits. Single filers hit the first threshold at $25,000 and married joint filers at $32,000, creating a cliff where small income increases can make benefits taxable. Higher-income thresholds can push taxation up to 85% of benefits.
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