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The inclusion of tax-exempt income, such as municipal bond interest, in the calculation of provisional income.
The Modified Adjusted Gross Income (MAGI) used to determine the 2025 “” phaseout is generally the taxpayer’s Adjusted Gross Income (AGI) with a few specific add‑backs — mainly certain tax‑excluded for...
Provisional income — also called combined income — is the IRS construct used to decide whether and how much of a person’s Social Security benefits are taxable, and it is calculated by adding one-half ...
for 2025 is computed as adjusted gross income (AGI) plus tax‑exempt interest plus one‑half of , so the question of what is “excluded” turns on what does not count toward AGI or tax‑exempt interest in ...
A clear consensus in the and tax commentary is that tax‑exempt municipal bond interest is counted when computing provisional income for Social Security taxation even though it is not itself federally ...
The ’s MAGI is not a catch‑all “add back everything” formula; for this specific deduction and tax guidance tie MAGI to a narrow set of exclusions you must undo — chiefly foreign‑source exclusions and ...
A small set of practical tax moves can materially reduce provisional income—the calculation (AGI + tax‑exempt interest + 50% of ) that determines whether up to 85% of benefits are taxable—and thereby ...