How Changes in Social Security Tax Rules Will Affect You in 2026

Major shifts are coming to Social Security taxes in 2026—and retirees, workers, and high earners should pay close attention. As provisions from the 2017 Tax Cuts and Jobs Act (TCJA) are set to expire, many Americans could see higher taxable income, affecting how much of their Social Security benefits get taxed. According to the Social Security Administration (SSA), roughly half of all beneficiaries already pay taxes on part of their benefits. When key tax thresholds revert in 2026, that number could climb even higher. Understanding what’s changing now gives retirees time to adjust before those increases take effect.

The Return of Higher Tax Brackets

When the TCJA expires, federal income tax rates will change. The IRS released tax brackets for 2026, so you can plan ahead. While this doesn’t directly change Social Security itself, it means more retirees may pay a different tax rate on the same income. For couples with modest pensions, investment earnings, or part-time work, this shift could push them into higher taxable thresholds for Social Security benefits.

Unchanged Thresholds, Bigger Impact

One frustrating detail: Social Security’s taxation thresholds haven’t been adjusted for inflation since 1984. Individuals earning more than $25,000—or couples earning over $32,000—may have up to 50% of their benefits taxed. Above $34,000 for individuals or $44,000 for couples, as much as 85% of benefits can be taxable. Because these income limits stay frozen while costs and wages rise, more retirees fall into taxable territory each year.

Why 2026 Will Hit Retirees Harder

For retirees who rely on multiple income sources, the timing of withdrawals will matter more than ever. The AARP warns that when tax cuts expire, combined income from retirement accounts, pensions, or annuities could push many into higher taxation on their benefits. Even if your Social Security payments stay the same, your tax liability could rise significantly due to bracket compression. Those who haven’t revisited their withdrawal strategy since retiring may need to do so before the new rules begin.

Strategies to Reduce Future Taxes

There’s still time to prepare before 2026. Converting traditional retirement funds to Roth accounts reduces taxable withdrawals later—and Roth income doesn’t count toward Social Security’s taxable thresholds. Retirees can also delay taking required minimum distributions (RMDs) until age 73 if possible, spacing income more efficiently over time. Charitable distributions from IRAs can further reduce taxable income while supporting causes you care about.

The Role of State Taxes

While federal taxes often get the spotlight, state-level Social Security taxation adds another layer of complexity. The Tax Foundation notes that 11 states still tax Social Security to some degree, including Colorado, Minnesota, and Utah. Several others—like Missouri and Nebraska—are phasing out these taxes in 2025 and 2026. Retirees planning to relocate should factor in state tax rules alongside federal changes, as moving to a tax-friendly state can meaningfully protect income.

Planning Ahead Before the Rules Shift

The 2026 tax changes may not seem dramatic yet, but their cumulative effect could surprise many retirees. Reviewing your withdrawal plan, adjusting withholding, and exploring Roth conversions can minimize the hit before new rates apply. The best time to prepare for a higher tax future is while rates are still low.

Are you planning to adjust your retirement or withdrawal strategy before 2026? Share your thoughts in the comments—your approach might help other retirees prepare smarter.