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Income Taxes and Your Social Security Benefits

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Income Taxes and Your Social Security Benefits

David Vinokurov, District Manager, Trenton, NJ, Social Security Administration

With tax season upon us, many of you have asked about Income Taxes And Your Social Security Benefits. Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

Note: No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an “individual” and your combined income* is
  • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $34,000, up to 85 percent of your benefits may be taxable.
  • file a joint return, and you and your spouse have a combined income* that is
  • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
  • more than $44,000, up to 85 percent of your benefits may be taxable.
  • are married and file a separate tax return, you probably will pay taxes on your benefits.

 

How can I get a form SSA-1099/1042S, Social Security Benefit Statement?

An SSA-1099 is a tax form we mail each year in January to people who receive Social Security benefits. It shows the total amount of benefits you received from Social Security in the previous year so you know how much Social Security income to report to IRS on your tax return.

If you are a noncitizen who lives outside of the United States and you received or repaid Social Security benefits last year, we will send you form SSA-1042S instead.

Note: The forms SSA-1099 and SSA-1042S are not available for people who receive Supplemental Security Income (SSI).

If you currently live in the United States and you need a replacement form SSA-1099 or SSA-1042S, we have a new way for you to get an instant replacement quickly and easily beginning February 1st by:

Withholding Income Tax From Your Social Security Benefits

 

You can ask us to withhold federal taxes from your Social Security when you apply for benefits.

If you are already receiving benefits or if you want to change or stop your withholding, you’ll need a form W-4V from the Internal Revenue Service (IRS).

You can download the form, or call the IRS toll-free number 1-800-829-3676 and ask for Form W-4V, Voluntary Withholding Request. (If you are deaf or hard of hearing, call the IRS TTY number, 1-800-829-4059.)

When you complete the form, you will need to select the percentage of your monthly benefit amount you want withheld. You can have 7%, 10%, 15% or 25% of your monthly benefit withheld for taxes.

Note: Only these percentages can be withheld. Flat dollar amounts are not accepted.

 

Sign the form and return it to your local Social Security office by mail or in person.

If you need more information

If you need more information about tax withholding, read IRS Publication 554, Tax Guide for Seniors, and Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

If you have questions about your tax liability or want to request a Form W-4V, you can also call the IRS at 1-800-829-3676 (TTY 1-800-829-4059).

 

Heat and Energy Assistance

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According to the federal government (US Energy Information Administration), heating bills are expected to increase slightly this season compared to last winter. Those who heat their homes with oil can expect to see an average of about $220 or 12% more this winter. Those households that heating with natural gas are expected to spend an average of $27 or 4 % more. While those heating their homes with electricity can expect to spend an average of $18 r 2% more than last winter.

For those who need assistance the Low Income Home Energy Assistance Program or LIHEAP is now available for the coming winter season. LIHEAP is designed to help low-income families and individuals meet home heating and medically necessary cooling costs. This year, the application period is November 1, 2011 to April 30, 2012.  To apply for LIHEAP, contact the authorized local community action agency or community based organization in your area.  A list of these agencies is found at www.energyassistance.nj.gov.  For persons age 60 or over, or who are disabled, applications may be received and returned by mail.  Other households may apply by mail at the discretion of the local agency. People who participated in LIHEAP last year will receive a recertification form in the mail to renew assistance through this program.

To be eligible for LIHEAP benefits, the applicant household must be responsible for home heating or cooling costs, either directly or included in the rent; and have gross income at or below 200% of the federal poverty level.  The chart below gives specific monthly gross income maximums for FFY 2012.  Persons who live in public housing and/or receive rental assistance are not eligible unless they pay for their own heating/cooling costs directly to the fuel supplier.  The amount of the LIHEAP heating benefit is determined by income, household size, fuel type, and heating region.  This year, the medically necessary cooling assistance benefit is set at $160.

For further information on LIHEAP or to locate the nearest application agency, call 1-800-510-3102.  Additional information about LIHEAP, including an application, is also available at www.energyassistance.nj.gov.

  LIHEAP

MAXIMUM MONTHLY GROSS INCOME ELIGIBILITY LEVELS
FFY 2012

Household

Size

 USF

Program

 LIHEAP

Program
1 $1,589 $1,815
2  $2,146 $2,452
3 $2,703 $3,089
4 $3,260 $3,725
5 $3,817 $4,362
6 $4,374 $4,999
7 $4,931 $5,635
8 $5,488 $6,272
9 $6,045 $6,909
10 $6,602 $7,333
11 $7,159 $7,485
12 $7,716 $7,638
If more than 12, add: $557 for each person $153 for each person

 If you are above the following income guidelines, but still need assistance with your heating or energy bills you may be eligible for assistance through NJ Shares. NJ SHARES provides energy assistance to moderate and fixed-income households experiencing a financial crisis. Eligibility is based on household size and income. Their clients are families and individuals who do not qualify for Federal and State assistance programs due to the household’s income. NJ SHARES Grant amounts can be up to $700 for heating source (gas, oil, propane and electric heat), and can be up to $300 for electric service. Grants must result in continuance and/or restoration of service. Applicants must demonstrate a temporary financial need and a history of good-faith payments to their energy provider.

 Eligibility Guidelines

 Applicants Must:

  • Reside in New Jersey
  • Be experiencing a financial crisis, such as a job loss or illness
  • Be behind on their energy bill, or need a fuel delivery
  • Have income over the limit for Federal programs such as the Low Income Energy Assistance Program (LIHEAP) and state programs such as the Universal Service Fund (USF).
  • Have an income level that does not exceed 400% of the Federal Poverty Level
  • Have made a good-faith payment of $100 or more within 90 days of applying for NJ SHARES (for gas and electric customers; deliverable fuel customers are excluded from this rule)

Guidelines for Seniors and the Disabled:

  • Applicants 65 years of age or older, with households of one or two members, will be eligible for NJ SHARES if the maximum household income is $80,000 annually or $6,666 monthly. Proof of age is required.
  • Applicants receiving Federal Social Security Disability (SSD) benefits, with households of one or two members, will be eligible for NJ SHARES if the maximum household income is $80,000 annually or $6,666 monthly. Applicants must show proof of Federal SSD benefit.

 Required Documentation for NJ SHARES applications:

  • Documents should be furnished to the intake agency at time of application.

1) Proof of Income (last four consecutive weeks prior to application date)

2) Proof of Identification

3) Most Recent Energy Bill