5 Ways to Pay $0 in Taxes on Social Security in 2026

Understanding the Taxation of Social Security Benefits

Many people assume that their Social Security benefits are entirely tax-free. However, this is not always the case. According to Pew Research, nearly half of all beneficiaries have some form of tax liability on their benefit payments. If you earn a middle or high income, it’s likely that you’ll owe some of your benefits back to the government.

How Taxes on Social Security Work

The amount of tax you pay on your Social Security benefits depends on your family’s combined provisional income. This includes your adjusted gross income, plus any nontaxable interest and half of your Social Security benefits. For 2026, the thresholds are $25,000 for a single taxpayer and $32,000 for a couple filing jointly. Depending on your income, you could owe taxes on either 50% or 85% of your benefits.

If you live in a state that also levies a tax on these benefits, your annual tax bill could be substantial. Fortunately, there are several strategies you can use to lower or even eliminate these taxes.

Top Strategies to Reduce or Eliminate Taxes on Social Security Benefits

1. Move to a New State

Nine states across the country charge an additional tax on Social Security benefits, including Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Some of these states may offer special exemptions based on your age and income. However, the most effective way to eliminate this tax is to move to a state that does not levy it.

Relocating can also help reduce other taxes, allow you to downsize your home, and lower your overall cost of living.

2. Delay Your Social Security Claim

The Internal Revenue Service (IRS) includes half of your Social Security benefits in the combined income calculation used to determine tax liability. If you delay your claim, you may reduce your combined income for a period in retirement. For example, if you retire at 62 but wait until 67 to claim, you would have five years without benefits counted toward that calculation. That could keep you under the income thresholds for taxation.

Delaying also increases your monthly benefit. Payments rise gradually each year you wait, up to age 70, according to the Social Security Administration.

3. Withdraw from a Roth 401(k) or Roth IRA

Distributions from a Roth account are not included in the provisional income calculation, making them a powerful tool for retirees trying to manage taxes. A retiree who needs $20,000 to cover living expenses could withdraw it from a Roth account instead of a traditional IRA. This may help them avoid increasing provisional income and keep more of their Social Security benefits tax-free.

This strategy works best for households that contributed to Roth accounts earlier in their careers or converted traditional IRAs during lower-income years.

4. Use Special Deductions

If you’re 65 or older, you may qualify for an enhanced seniors deduction available over the next few years. Eligible individuals can claim an additional $6,000 deduction on top of their standard or itemized deduction in 2026, which is subject to income limits.

The deduction applies per person. A couple over the age limit and under the income limit together could benefit from up to $12,000 in combined enhanced deductions.

5. Harvest Tax Losses

If you’re holding investments with paper losses, such as an underperforming stock or mutual fund, selling them could create cash to offset taxable income. Tax-loss harvesting allows you to reduce taxable income by up to $3,000 a year. Selling losing investments to fund expenses while staying below the provisional income thresholds could reduce or eliminate taxes on your benefits.

This approach can be especially useful in volatile markets, when paper losses can be turned into tax advantages without affecting your long-term asset allocation.

Final Thoughts

If you’re a middle or upper-income retiree, some of your Social Security benefits may be taxable. But with careful planning and strategic moves, you may be able to cut that bill or even reduce it to zero. By considering these strategies, you can better manage your tax obligations and protect your retirement savings.