26 U.S.C. § 86 | Social security and tier 1 railroad retirement benefits

(a)

In general

(1)

In general

Except as provided in paragraph (2), gross income for the taxable year of any taxpayer described in subsection (b) (notwithstanding section 207 of the Social Security Act) includes social security benefits in an amount equal to the lesser of—

(A)

one-half of the social security benefits received during the taxable year, or

(B)

one-half of the excess described in subsection (b)(1).

(2)

Additional amount

In the case of a taxpayer with respect to whom the amount determined under subsection (b)(1)(A) exceeds the adjusted base amount, the amount included in gross income under this section shall be equal to the lesser of—

(A)

the sum of—

(i)

85 percent of such excess, plus

(ii)

the lesser of the amount determined under paragraph (1) or an amount equal to one-half of the difference between the adjusted base amount and the base amount of the taxpayer, or

(B)

85 percent of the social security benefits received during the taxable year.

(b)

Taxpayers to whom subsection (a) applies

(1)

In general

A taxpayer is described in this subsection if—

(A)

the sum of—

(i)

the modified adjusted gross income of the taxpayer for the taxable year, plus

(ii)

one-half of the social security benefits received during the taxable year, exceeds

(B)

the base amount.

(2)

Modified adjusted gross income

For purposes of this subsection, the term “modified adjusted gross income” means adjusted gross income—

(A)

determined without regard to this section and sections 85(c), 135, 137, 221, 911, 931, and 933, and

(B)

increased by the amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax.

(c)

Base amount and adjusted base amount

For purposes of this section—

(1)

Base amount

The term “base amount” means—

(A)

except as otherwise provided in this paragraph, $25,000,

(B)

$32,000 in the case of a joint return, and

(C)

zero in the case of a taxpayer who—

(i)

is married as of the close of the taxable year (within the meaning of section 7703) but does not file a joint return for such year, and

(ii)

does not live apart from his spouse at all times during the taxable year.

(2)

Adjusted base amount

The term “adjusted base amount” means—

(A)

except as otherwise provided in this paragraph, $34,000,

(B)

$44,000 in the case of a joint return, and

(C)

zero in the case of a taxpayer described in paragraph (1)(C).

(d)

Social security benefit

(1)

In general

For purposes of this section, the term “social security benefit” means any amount received by the taxpayer by reason of entitlement to—

(A)

a monthly benefit under title II of the Social Security Act, or

(B)

a tier 1 railroad retirement benefit.

(2)

Adjustment for repayments during year

(A)

In general

For purposes of this section, the amount of social security benefits received during any taxable year shall be reduced by any repayment made by the taxpayer during the taxable year of a social security benefit previously received by the taxpayer (whether or not such benefit was received during the taxable year).

(B)

Denial of deduction

If (but for this subparagraph) any portion of the repayments referred to in subparagraph (A) would have been allowable as a deduction for the taxable year under section 165, such portion shall be allowable as a deduction only to the extent it exceeds the social security benefits received by the taxpayer during the taxable year (and not repaid during such taxable year).

(3)

Workmen’s compensation benefits substituted for social security benefits

For purposes of this section, if, by reason of section 224 of the Social Security Act (or by reason of section 3(a)(1) of the Railroad Retirement Act of 1974), any social security benefit is reduced by reason of the receipt of a benefit under a workmen’s compensation act, the term “social security benefit” includes that portion of such benefit received under the workmen’s compensation act which equals such reduction.

(4)

Tier 1 railroad retirement benefit

For purposes of paragraph (1), the term “tier 1 railroad retirement benefit” means—

(A)

December 31, 1936 the amount of the annuity under the Railroad Retirement Act of 1974 equal to the amount of the benefit to which the taxpayer would have been entitled under the Social Security Act if all of the service after , of the employee (on whose employment record the annuity is being paid) had been included in the term “employment” as defined in the Social Security Act, and

(B)

a monthly annuity amount under section 3(f)(3) of the Railroad Retirement Act of 1974.

(5)

Effect of early delivery of benefit checks

For purposes of subsection (a), in any case where section 708 of the Social Security Act causes social security benefit checks to be delivered before the end of the calendar month for which they are issued, the benefits involved shall be deemed to have been received in the succeeding calendar month.

(e)

Limitation on amount included where taxpayer receives lump-sum payment

(1)

Limitation

If—

(A)

any portion of a lump-sum payment of social security benefits received during the taxable year is attributable to prior taxable years, and

(B)

the taxpayer makes an election under this subsection for the taxable year,

then the amount included in gross income under this section for the taxable year by reason of the receipt of such portion shall not exceed the sum of the increases in gross income under this chapter for prior taxable years which would result solely from taking into account such portion in the taxable years to which it is attributable.

(2)

Special rules

(A)

Year to which benefit attributable

For purposes of this subsection, a social security benefit is attributable to a taxable year if the generally applicable payment date for such benefit occurred during such taxable year.

(B)

Election

An election under this subsection shall be made at such time and in such manner as the Secretary shall by regulations prescribe. Such election, once made, may be revoked only with the consent of the Secretary.

(f)

Treatment as pension or annuity for certain purposes

For purposes of—

(1)

section 22(c)(3)(A) (relating to reduction for amounts received as pension or annuity),

(2)

section 32(c)(2) (defining earned income),

(3)

section 219(f)(1) (defining compensation), and

(4)

section 911(b)(1) (defining foreign earned income),

any social security benefit shall be treated as an amount received as a pension or annuity.

Pub. L. 98–21, title I, § 121(a)Apr. 20, 198397 Stat. 80 Pub. L. 98–76, title II, § 224(d)Aug. 12, 198397 Stat. 424 Pub. L. 98–369, div. A, title IV, § 474(r)(2)oJuly 18, 198498 Stat. 839 Pub. L. 99–272, title XII, § 12111(b)Apr. 7, 1986100 Stat. 287 Pub. L. 99–514, title I, § 131(b)(2)Oct. 22, 1986100 Stat. 2113 Pub. L. 100–647, title I, § 1001(e)Nov. 10, 1988102 Stat. 3351 Pub. L. 103–66, title XIII, § 13215(a)Aug. 10, 1993107 Stat. 475 Pub. L. 103–296, title III, § 309(d)Aug. 15, 1994108 Stat. 1523 Pub. L. 104–188, title IAug. 20, 1996110 Stat. 1887 Pub. L. 105–277, div. J, title IV, § 4003(a)(2)(B)Oct. 21, 1998112 Stat. 2681–908 Pub. L. 107–16, title IV, § 431(c)(1)June 7, 2001115 Stat. 68 Pub. L. 108–357, title I, § 102(d)(1)Oct. 22, 2004118 Stat. 1428 Pub. L. 115–97, title I, § 13305(b)(1)Dec. 22, 2017131 Stat. 2126 Pub. L. 116–260, div. EE, title I, § 104(b)(2)(C)Dec. 27, 2020134 Stat. 3041 Pub. L. 117–2, title IX, § 9042(b)(2)Mar. 11, 2021135 Stat. 122 (Added and amended , title III, § 335(b)(2)(A), , , 130; , , ; , div. B, title VI, § 2661()(1), , , 1158; , title XIII, § 13204(a), , , 313; , title XIII, § 1301(j)(8), title XVIII, § 1847(b)(2), , , 2658, 2856; , title VI, § 6009(c)(1), , , 3690; , (b), , , 476; , , ; , §§ 1704(t)(3), 1807(c)(2), , , 1902; , , ; , , ; , , ; , , ; , , ; , , .)

Editorial Notes

References in Text

act Aug. 14, 1935, ch. 531 49 Stat. 620 section 1305 of Title 42The Social Security Act, referred to in subsecs. (a)(1) and (d)(1)(A), (3), (4)(A), (5), is , , which is classified generally to chapter 7 (§ 301 et seq.) of Title 42, The Public Health and Welfare. Title II of the Act is classified generally to subchapter II (§ 401 et seq.) of Title 42. Sections 207, 224, and 708 of the Act are classified to sections 407, 424a, and 909 of Title 42, respectively. For complete classification of this Act to the Code, see and Tables.

act Aug. 29, 1935, ch. 812 Pub. L. 93–445, title I, § 101Oct. 16, 197488 Stat. 1305 section 231 of Title 45 section 231t of Title 45The Railroad Retirement Act of 1974, referred to in subsec. (d)(3), (4), is , as amended generally by , , , which is classified generally to subchapter IV (§ 231 et seq.) of chapter 9 of Title 45, Railroads. Section 3(a)(1), (f)(3) of the Act is classified to section 231b(a)(1), (f)(3) of Title 45. For further details and complete classification of this Act to the Code, see Codification note set out preceding , , and Tables.

Prior Provisions

section 87 of this titleA prior section 86 was renumbered .

Amendments

Pub. L. 117–22021—Subsec. (b)(2)(A). inserted “85(c),” before “135”.

Pub. L. 116–2602020—Subsec. (b)(2)(A). struck out “222,” after “221,”.

Pub. L. 115–972017—Subsec. (b)(2)(A). struck out “199,” before “221”.

Pub. L. 108–3572004—Subsec. (b)(2)(A). inserted “199,” before “221”.

Pub. L. 107–162001—Subsec. (b)(2)(A). inserted “222,” after “221,”.

Pub. L. 105–2771998—Subsec. (b)(2)(A). inserted “221,” after “137,”.

Pub. L. 104–188, § 1704(t)(3)1996—Subsec. (b)(2). , substituted “means adjusted” for “means adusted” in introductory provisions.

Pub. L. 104–188, § 1807(c)(2)Subsec. (b)(2)(A). , inserted “137,” before “911”.

Pub. L. 103–2961994—Subsec. (d)(1). struck out at end “For purposes of the preceding sentence, the amount received by any taxpayer shall be determined as if the Social Security Act did not contain section 203(i) thereof.”

Pub. L. 103–66, § 13215(a)1993—Subsec. (a). , designated existing provisions as par. (1), inserted par. (1) heading, substituted “Except as provided in paragraph (2), gross” for “Gross”, redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, and added par. (2).

Pub. L. 103–66, § 13215(b)Subsec. (c). , amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘base amount’ means—

“(1) except as otherwise provided in this subsection, $25,000,

“(2) $32,000, in the case of a joint return, and

“(3) zero, in the case of a taxpayer who—

“(A) is married at the close of the taxable year (within the meaning of section 7703) but does not file a joint return for such year, and

“(B) does not live apart from his spouse at all times during the taxable year.”

Pub. L. 100–647, § 6009(c)(1)1988—Subsec. (b)(2)(A). , inserted “135,” before “911”.

Pub. L. 100–647, § 1001(e)Subsec. (f)(4), (5). , redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “section 221(b)(2) (defining earned income), and”.

Pub. L. 99–514, § 131(b)(2)1986—Subsec. (b)(2)(A). , substituted “sections” for “sections 221,”.

Pub. L. 99–514, § 1301(j)(8)Subsec. (c)(3)(A). , substituted “section 7703” for “section 143”.

Pub. L. 99–272, § 13204(a)Subsec. (d)(4). , in amending par. (4) generally, designated existing provisions as introductory clause of par. (4), struck out “a monthly benefit under section 3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retirement Act of 1974”, and added cls. (A) and (B).

Pub. L. 99–272, § 12111(b)Subsec. (d)(5). , added par. (5).

Pub. L. 99–514, § 1847(b)(2)Subsec. (f)(1). , substituted “section 22(c)(3)(A)” for “section 37(c)(3)(A)”.

Pub. L. 98–369, § 2661o1984—Subsec. (f)(1). ()(1), added par. (1). Former par. (1) redesignated par. (2).

Pub. L. 98–369, § 474(r)(2), substituted “section 32(c)(2)” for “section 43(c)(2)”.

Pub. L. 98–369, § 2661oSubsec. (f)(2)–(5). ()(1), redesignated pars. (1) to (4) as (2) to (5), respectively.

Pub. L. 98–21, § 335(b)(2)(A)1983—Subsec. (a). , inserted “(notwithstanding section 207 of the Social Security Act)”.

Pub. L. 98–76Subsec. (d)(4). inserted “3(f)(3),” after “3(a),”.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Pub. L. 117–2Dec. 31, 2019section 9042(c) of Pub. L. 117–2 section 74 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date of 2020 Amendment

Pub. L. 116–260Dec. 31, 2020section 104(c) of div. EE of Pub. L. 116–260 section 25A of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date of 2017 Amendment

Pub. L. 115–97Dec. 31, 2017section 13305(c) of Pub. L. 115–97 section 74 of this titleAmendment by applicable to taxable years beginning after , except as provided by transition rule, see , set out as a note under .

Effective Date of 2004 Amendment

Pub. L. 108–357Dec. 31, 2004section 102(e) of Pub. L. 108–357 section 56 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date of 2001 Amendment

Pub. L. 107–16Dec. 31, 2001section 431(d) of Pub. L. 107–16 section 62 of this titleAmendment by applicable to payments made in taxable years beginning after , see , set out as a note under .

Effective Date of 1998 Amendment

Pub. L. 105–277, div. J, title IV, § 4003lOct. 21, 1998112 Stat. 2681–910

section 7508A of this title Pub. L. 105–34“The amendments made by this section [amending this section and sections 135, 137, 163, 172, 219, 221, 264, 351, 368, 469, 954, 2001, 6311, 6404, and 9510 of this title and amending provisions set out as a note under ] shall take effect as if included in the provisions of the 1997 Act [] to which they relate.”

(), , , provided that:

Effective Date of 1996 Amendment

section 1807(c)(2) of Pub. L. 104–188Dec. 31, 1996section 1807(e) of Pub. L. 104–188 section 23 of this titleAmendment by applicable to taxable years beginning after , see , set out as an Effective Date note under .

Effective Date of 1994 Amendment

Pub. L. 103–296, title III, § 309(e)(2)Aug. 15, 1994108 Stat. 1524

December 31, 1995“The amendment made by subsection (d) [amending this section] shall apply with respect to benefits received after , in taxable years ending after such date.”

, , , provided that:

Effective Date of 1993 Amendment

Pub. L. 103–66, title XIII, § 13215(d)Aug. 10, 1993107 Stat. 477

December 31, 1993“The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after .”

, , , provided that:

Effective Date of 1988 Amendment

section 1001(e) of Pub. L. 100–647 Pub. L. 99–514 section 1019(a) of Pub. L. 100–647 section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .

Pub. L. 100–647, title VI, § 6009(d)Nov. 10, 1988102 Stat. 3690

section 135 of this title section 136 of this titleDecember 31, 1989“The amendments made by this section [enacting , amending this section and sections 219 and 469 of this title, and renumbering former section 135 as ] shall apply to taxable years beginning after .”

, , , provided that:

Effective Date of 1986 Amendment

section 131(b)(2) of Pub. L. 99–514Dec. 31, 1986section 151(a) of Pub. L. 99–514 section 1 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

section 1301(j)(8) of Pub. L. 99–514Aug. 15, 1986Pub. L. 99–514 section 141 of this titleAmendment by applicable to bonds issued after , except as otherwise provided, see sections 1311–1318 of , set out as an Effective Date; Transitional Rules note under .

section 1847(b)(2) of Pub. L. 99–514 Pub. L. 98–369, div. A section 1881 of Pub. L. 99–514 section 48 of this titleAmendment by effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, , to which such amendment relates, see , set out as a note under .

section 12111(b) of Pub. L. 99–272Apr. 7, 1986section 12111(c) of Pub. L. 99–272 section 909 of Title 42Amendment by applicable with respect to benefit checks issued for months ending after , see , set out as a note under , The Public Health and Welfare.

Pub. L. 99–272, title XIII, § 13204(b)Apr. 7, 1986100 Stat. 313

December 31, 1985“The amendment made by subsection (a) [amending this section] shall apply to any monthly benefit for which the generally applicable payment date is after .”

, , , provided that:

Effective Date of 1984 Amendment

section 474(r)(2) of Pub. L. 98–369Dec. 31, 1983section 475(a) of Pub. L. 98–369 section 21 of this titleAmendment by applicable to taxable years beginning after , and to carrybacks from such years, see , set out as a note under .

section 2661 of Pub. L. 98–369 Pub. L. 98–21 section 2664(a) of Pub. L. 98–369 section 401 of Title 42Amendment by effective as though included in the enactment of the Social Security Amendments of 1983, , see , set out as a note under , The Public Health and Welfare.

Effective Date of 1983 Amendment

Pub. L. 98–76Dec. 31, 1983Dec. 31, 1983Jan. 1, 1984section 227(b) of Pub. L. 98–76 section 72 of this titleAmendment by applicable to benefits received after , in taxable years ending after such date, except for portions of lump-sum payments received after , if the generally applicable payment date for such portion was before , see set out as a note under .

Effective Date

Pub. L. 98–21, title I, § 121(g)Apr. 20, 198397 Stat. 84 Pub. L. 99–514, § 2Oct. 22, 1986100 Stat. 2095

“(1)

In general .—

section 6050F of this title section 3413 of Title 12 section 401 of Title 42December 31, 1983Except as provided in paragraph (2), the amendments made by this section [enacting this section and , amending sections 85, 128, 861, 871, 1441, and 6103 of this title and , Banks and Banking, and enacting provisions set out as a note under , The Public Health and Welfare] shall apply to benefits received after , in taxable years ending after such date.

“(2)

december 31, 1983Treatment of certain lump-sum payments received after .—

December 31, 1983January 1, 1984The amendments made by this section shall not apply to any portion of a lump-sum payment of social security benefits (as defined in section 86(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) received after , if the generally applicable payment date for such portion was before .”

, , , as amended by , , , provided that:

Plan Amendments Not Required Until January 1, 1989

Pub. L. 99–514Jan. 1, 1989section 1140 of Pub. L. 99–514 section 401 of this titleFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after , see , as amended, set out as a note under .