Are social security benefits taxable income in Illinois?
I started collecting SS benefits at 66 and had them take taxes out of the monthly payment since I was also working. I just retired December 2020. I now have no other income except SS. Are SS benefits taxable income? Shall I discontinue having them take out for taxes?
Terry Says
The taxation of Social Security benefits depends on your income. Basically this is the rule for a single filer:
For the 2019 and 2020 tax years, single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income was more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.
In Illinois, Social Security benefits and income from most retirement plans are exempt.
I would consult with your tax preparer to have a look at your entire financial picture, including whether if youy are living ONLY on SS, you will be required to file at all. Remember at age 72, you will take RMDs from any retirement savings, which could impact taxation of your SS benefits.
