The 2026 Social Security benefit increase may raise the portion of your benefits subject to federal income tax, but it does not create a separate tax. Your result depends on combined income, filing status, withholding, and the net benefits reported on Form SSA-1099. Social Security benefits increased 2.8% for 2026, affecting nearly 71 million beneficiaries beginning with January payments. SSI payments also rose for nearly 7.5 million recipients on December 31, 2025, according to the Social Security Administration's announcement.
Table of Contents
- What the 2.8% increase changes
- When do Social Security benefits become taxable?
- Could the increase push you across a threshold?
- Should you change federal withholding?
- How to report benefits on your tax return
What the 2.8% increase changes
The social Security Administration's 2026 fact sheet says the increase is a cost-of-living adjustment, or COLA. It reflects the CPI-W increase from the third quarter of 2024 through the third quarter of 2025. The COLA enters the same benefit-tax calculation used before the increase.
It can still affect your taxes because one-half of your Social Security benefits counts toward combined income. For example, a hypothetical $20,000 annual benefit would rise by $560 after a 2.8% increase. If other income remained unchanged, the Social Security component of combined income would rise by $280.
When do Social Security benefits become taxable?
Combined income generally means one-half of Social Security benefits plus all other income, including tax-exempt interest. The IRS thresholds in Publication 554 depend on filing status: The 85% figure is the maximum portion of benefits that may enter taxable income.
It is not an 85% tax rate, and crossing the upper threshold does not mean the IRS takes 85% of your benefits. A married person filing separately who lived with a spouse at any point during the year has a $0 base amount. That rule can make benefits taxable at much lower income levels.
- Single, head of household, or qualifying surviving spouse: The base amount is $25,000. Above $34,000, up to 85% of benefits can be taxable.
- Married filing jointly: The base amount is $32,000. Above $44,000, up to 85% of benefits can be taxable.
Could the increase push you across a threshold?
A recipient near a base amount may cross it because of the COLA, even when pensions, wages, investment income, and tax-exempt interest remain unchanged. Crossing a threshold can make part of the benefit taxable; it does not automatically make the entire benefit taxable. Consider a single filer with $20,000 in annual benefits and $14,800 of other income.
Combined income would be $24,800. After a hypothetical 2.8% increase to $20,560, combined income would become $25,080, placing the filer above the $25,000 base amount. A practical estimate requires four steps: This estimate identifies whether closer review is warranted. It does not by itself calculate the taxable portion of benefits.
- Estimate net Social Security benefits for the year.
- Divide that amount by two.
- Add all other income, including tax-exempt interest.
- Compare the result with the threshold for your filing status.
Should you change federal withholding?
Social Security recipients may request voluntary federal withholding by submitting Form W-4V to the Social Security Administration. The only available rates are 7%, 10%, 12%, or 22% of each payment, as shown on the January 2026 Form W-4V. Because withholding is a percentage of each payment, the dollar amount withheld rises when the payment rises.
That increase may still be insufficient if more of the benefit becomes taxable or other income also changes. IRS Publication 915 notes that choosing no Social Security withholding may require more withholding from other income or estimated tax payments. To change or stop voluntary withholding, submit a new request to the Social Security Administration.
How to report benefits on your tax return
Form SSA-1099 supplies the figures needed for federal reporting. Box 3 shows gross benefits, box 4 shows repayments, and box 5 shows net benefits after subtracting those repayments. Use box 5 to assess taxability and report net benefits on Form 1040 or 1040-SR line 6a.
Report only the calculated taxable portion on line 6b, following IRS Publication 915. Do not automatically enter 85% of box 5 on line 6b. When box 4 contains repayments, the subtraction is already reflected in box 5, so do not subtract those repayments again.