Will You Get a Tax Refund If You’re Taking Social Security Benefits?

There’s not much to look forward to except the hope of a tax refund at tax time.

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A tax refund is an excellent goal for older adults taking Social Security benefits, as is putting money back into your bank account, but is it?

Mark J. Kohler, an attorney, CPA and senior partner with KKOS Attorneys, unpacked some myths about senior citizens on Social Security and how their tax refund will be affected.

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For the Social Security-Reliant

While every taxpayer’s situation differs, Kohler said that you will not likely get a tax refund if you live only on Social Security income.

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“If Social Security is your only income, you will not get a refund because you’re living at almost the poverty level. Thus, it wouldn’t be taxed anyway.”

According to the Social Security Administration, the average Social Security benefit for 2025 is $1,976 per month or about $23,712 per year, which is well below what economists deem a living wage.

Kohler pointed out that tax refunds are typically only forthcoming when an employer has withheld too much of your money or you haven’t paid enough on a side hustle or regular business income.

“Social Security should be the cherry on top of a quality long-term savings and retirement plan,” Kohler said. “The sad part is some people’s Social Security is all they’ve got. Those are the people that aren’t paying taxes on Social Security. So you would never get a refund.”

For Those With Sources of Income

You could receive a refund if you receive Social Security benefits and are still employed or have a side gig. Kohler explained this could happen if you have extra withholdings that aren’t appropriately calculated or other “tax strategies you employ to reduce your taxable income,” he said.

For those who have a W-2 job, this can mean looking for tax deductions, such as buying a new solar water heater at Home Depot or purchasing an electric vehicle — which comes with tax credits. It can also mean maxing out your tax-advantaged retirement accounts, such as 401(k) plans or IRAs and health savings accounts, which allow you to deduct some of your pre-tax income. Other expenses may be deductible, such as alimony payments, student loan interest, bad debts, losses from disasters and theft and charitable contributions, according to the IRS.

If you are self-employed or have a side hustle, you may be able to take advantage of other deductions that fall under the category of “ordinary and necessary” (according to the IRS) to operate your business, ranging from supplies to business use of a home or car.

Kohler shared there a few ways to gauge if a person collecting Social Security benefits will receive a refund.

“If you employ a tax strategy that reduces your adjusted gross income in conjunction with Social Security earnings, you will get a refund because you used a tax strategy to reduce your tax.”

He said receiving Social Security benefits is “irrelevant in the determination.” If you get a refund, it’s contingent on the company you worked for and if they withheld too much.

Your best bet is to meet with a CPA or other financial advisor to review your financial picture and ensure you’ve set up an effective tax strategy.

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