What Happened?

More than half of married Social Security disability recipients between the ages of 25 and 59 may owe taxes on up to 85 percent of their benefits, while most single recipients owe nothing. A Congressional Research Service analysis shows that income thresholds determining when Social Security benefits get taxed have not changed since 1984, and a new federal tax law is now expected to reduce how much money flows into the Social Security and Medicare trust funds.

The Congressional Research Service (CRS) is the nonpartisan research arm of Congress. Its analysis examines how marital status, outside income, and recent tax law changes combine to create sharply different tax bills for people receiving disability benefits.

Why Does it Matter to Me?

Nearly 98 percent of Social Security recipients between the ages of 25 and 59 receive benefits because of a disability. Whether they owe income tax on those benefits depends largely on one factor: whether they have a working spouse.

Single recipients are largely shielded. More than 85 percent of single recipients in that age group fall below the income level where any benefits get taxed. Among those whose only income is Social Security, more than 99 percent owe nothing.

Married recipients face a different picture. Because a non-disabled spouse faces no earnings limit, household income can climb quickly. More than 52 percent of married recipients in that age group have income above the higher threshold, where taxes can apply to up to 85 percent of their Social Security benefits. The income cutoffs that trigger those taxes are:

  • Single filers: $25,000 for the first tier, $34,000 for the second tier
  • Married filing jointly: $32,000 for the first tier, $44,000 for the second tier

Those numbers have not moved since 1984, and they are not tied to inflation.

The Congressional Budget Office estimates that in 2026, income taxes on Social Security benefits will total $120 billion, equal to 7.1 percent of all benefits paid that year. That figure is projected to climb to $212 billion by 2036.

A new federal law, the One Big Beautiful Bill Act (P.L. 119-21), created a temporary $6,000 tax deduction for individuals and a $12,000 deduction for couples over 65 filing jointly. The 2026 Social Security Trustees Report found that the law will reduce income tax paid on Social Security benefits, meaning the Social Security and Medicare trust funds will receive less revenue going forward.

Both Sides, Now

The CRS analysis does not take a position, but it lays out a clear tradeoff for Congress. Raising or indexing the income thresholds to inflation would lower tax bills for many recipients, particularly married couples. It would also reduce revenue flowing to Social Security and Medicare.

Leaving the thresholds unchanged keeps that revenue intact but means more recipients get pushed into taxable territory each year as wages and prices rise, even without any action by Congress. The report frames this as a choice Congress faces between indexing the thresholds and accepting continued revenue erosion to both trust funds.

The new deduction in P.L. 119-21 tilts the existing balance further by reducing taxable income for older filers, which the Trustees Report says will lower trust fund revenue.

What Happens Next?

Congress would need to pass new legislation to change the income thresholds or make the new deduction permanent. No bill to index the thresholds for inflation is currently scheduled for a vote. The Social Security trust funds face their own long-term funding pressures, which means any move to reduce revenue from benefit taxation would need to be weighed against the program's broader finances. Until Congress acts, the thresholds stay fixed at their 1984 levels.

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