Do Social Security Benefits Count as Gross Income?

Up to 85 percent of Social Security benefits can be included in gross income.
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For federal tax purposes, your "gross income" as defined by the Internal Revenue Service means all of your income that isn't exempt from tax. A portion of your Social Security benefits will be counted as part of your gross income for the year if you're married filing separately, or if half of your Social Security benefits plus any of your other gross income and tax-exempt interest for the year exceeds the limit for your filing status.

Calculating the Included Portion

Not all of your Social Security benefits count as gross income. According to the Social Security administration, nobody pays taxes on more than 85 percent of her Social Security benefits. As of 2014, if your combined income falls between $25,000 and $34,000 if you're single, or $32,000 and $44,000 if you're married filing jointly, up to half your benefits may be included in your taxable income. If your income exceeds those ranges, up to 85 percent of your benefits may be included.

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