The Social Security Administration (SSA) sends out benefit checks to about 70 million Americans each month. The amount each person receives is based on factors such as their earnings while working and the date they began claiming benefits. However, for July, some people may receive a smaller check than expected due to a new rule from the Internal Revenue Service (IRS).
Here’s what you need to know about this possible decrease and what to do if your benefit is reduced. Surveys conducted by Gallup over the last 23 years indicate that approximately 80% to 90% of retirees rely on their monthly Social Security check to cover essential expenses. Knowing exactly how much they’ll receive each month is really important.
A sudden drop in the amount could cause financial difficulties for these individuals. The possible decrease in July benefits is connected to new IRS rules. These rules, which started earlier this year, have begun to affect certain retirees.
This could result in them receiving less money. The updated tax rules won’t change the checks for all Social Security recipients in July. Specifically, the IRS rules will impact:
– Retirees who have federal taxes taken out of their Social Security benefits (people can choose to have 7%, 10%, 12%, or 22% withheld for federal income tax).
– People who have other sources of taxable income (like pensions or money taken out of IRAs). – Those in higher tax brackets are because of the total income they have.
IRS rule affects Social Security payouts
It’s essential to note that individuals receiving Supplemental Security Income (SSI) won’t be affected by tax withholding, as SSI is not taxable. The IRS provided guidance early in 2025 to help individuals with multiple income sources accurately report their taxes each year. As a result, some Social Security recipients have been placed in higher tax brackets.
This prompted the SSA to adjust the amount of tax it withheld. If you notice a lower amount on your July check, sign in to your SSA account and look at your IRS Form W-4V. You can either fill out a new form or choose not to have federal taxes withheld.
It may also be helpful to talk to a tax advisor. The actual amount deducted from your check depends on your income and tax bracket. This adjustment could occur again in August and later months, depending on federal and state tax policies.
Although the SSA sends out checks on the same date each month, the amount you receive may change. For more information, please check the official SSA or IRS websites.
