Social Security benefits are poised for a boost of around 3.8% next year, according to recent 2027 cost-of-living adjustment (COLA) projections from The Senior Citizens League. That isn’t likely to be game-changing for most seniors. It’ll only add about $79 to the average monthly benefit as of June 2026, but at least it’s something.
For most people, this modest boost will provide at least some help with the rising costs they’ve faced throughout 2026. But for a few, it could actually trigger a higher tax bill that takes back their COLA and then some.
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Some seniors could face Social Security benefit taxes for the first time
Federal Social Security benefit taxes haven’t changed in over 30 years. What was once a tax for the wealthy has gradually become a tax that even ordinary Americans owe. Even if you’ve never paid these taxes before, you could encounter them for the first time in 2027, thanks in part to the next COLA.
Your provisional income determines whether you’ll owe these taxes. That’s your adjusted gross income (AGI), plus any nontaxable interest from municipal bonds, and half your annual Social Security benefit. The following table breaks down what percentage of your benefit could be subject to ordinary income taxes:
Marital Status
0% of Benefits Taxable if Provisional Income Is Below:
Up to 50% of Benefits Taxable if Provisional Income Is Between:
Up to 85% of Benefits Taxable if Provisional Income Exceeds:
Single
$25,000
$25,000 and $34,000
$34,000
Married
$32,000
$32,000 and $44,000
$44,000
Source: Social Security Administration.
Falling into the taxable range could add hundreds or thousands of dollars to your tax bill in 2027, potentially wiping out any gains you get from the Social Security COLA. This will be most jarring if you’ve never owed benefit taxes before. But even those who are used to paying this tax could find themselves owing more than they did in years past due to the COLA and inflation driving up living costs.
How to prepare for Social Security benefit taxes in 2027 and beyond
If you’re worried you might owe Social Security benefit taxes next year, you can either set aside money to cover these taxes on your own or request that the Social Security Administration withhold money from your checks for taxes upfront. If it withholds too much, you’ll get the excess back with your tax refund.
Consult with a tax professional if you’re not sure which option is best or how much these taxes could cost. But consider waiting until we know what the 2027 Social Security COLA will be, so you have a better idea of where your provisional income might wind up next year.
