CRS Finds 52% of Married Disabled Beneficiaries Face Top Social Security Tax Tier
Updated
Updated · legis1.com · Sep 8
CRS Finds 52% of Married Disabled Beneficiaries Face Top Social Security Tax Tier
2 articles · Updated · legis1.com · Sep 8
Summary
More than 52% of married Social Security beneficiaries aged 25-59 have provisional income above the $44,000 second-tier threshold, making up to 85% of their benefits taxable, a CRS analysis published Sept. 2 found.
The gap is driven by thresholds frozen since 1984 and by spouses' earnings: less than 40% of married beneficiaries owe no tax on benefits, versus more than 85% of single beneficiaries who stay below the first-tier threshold.
Disabled workers dominate this age group—nearly 98% of beneficiaries 25-59 receive benefits based on disability—and a non-disabled spouse is not subject to Social Security's substantial gainful activity earnings cap.
The tax treatment matters for federal finances: CBO estimates taxes on Social Security benefits will reach $120 billion in 2026 and $212 billion by 2036, supporting both Social Security and Medicare trust funds.
A temporary $6,000 deduction created by the One Big Beautiful Bill Act is expected to reduce future taxes on benefits, sharpening Congress's choice between indexing thresholds or accepting lower trust-fund revenue.