Can You Get a Tax Refund If Social Security Is Your Only Income?

For millions of Americans relying solely on Social Security benefits, tax time often brings disappointment rather than refund checks. Understanding whether you can receive a tax refund if social security represents your only income depends largely on your overall financial situation and income sources.

According to the Social Security Administration, the average Social Security benefit for 2025 stands at approximately $1,976 per month, or about $23,712 annually. This figure falls well below what economists consider a living wage, which directly impacts whether recipients can claim a tax refund.

Why Most Social Security-Only Recipients Don’t Get Tax Refunds

The straightforward answer for those living exclusively on Social Security: you likely won’t receive a tax refund. Mark J. Kohler, an attorney and CPA with KKOS Attorneys, explains that this occurs because Social Security as a sole income source typically doesn’t generate tax liability in the first place.

“If Social Security is your only income, you will not get a refund because you’re living at almost the poverty level,” Kohler points out. “Thus, it wouldn’t be taxed anyway.” The core principle is simple—tax refunds occur when either an employer has withheld too much money or insufficient taxes were paid on other income sources. Since the income level itself falls below taxable thresholds, there’s nothing to refund.

The harsh reality is that many retirees have no choice in this matter. Social Security, while important, should ideally function as what Kohler calls “the cherry on top of a quality long-term savings and retirement plan.” When it becomes someone’s entire income, tax refunds become irrelevant because no taxes were owed to begin with.

When Social Security Recipients Can Actually Claim a Refund

The situation changes entirely for those receiving Social Security benefits alongside other income sources. Whether through continued employment, a side business, or investment returns, additional income creates opportunities for tax refunds.

This happens when you employ specific tax reduction strategies that lower your adjusted gross income. For traditional W-2 employees, opportunities include common deductions: purchasing energy-efficient equipment like solar water heaters or electric vehicles (which often qualify for tax credits), or maximizing contributions to tax-advantaged retirement accounts such as 401(k) plans, IRAs, and health savings accounts.

The IRS permits other deductible expenses too, including alimony payments, student loan interest, disaster and theft losses, and charitable contributions. Each reduces your taxable income and potentially increases your refund.

Self-employed individuals and those with side businesses have additional flexibility. The IRS allows deductions for expenses deemed “ordinary and necessary” to operate the business—supplies, home office use, vehicle expenses, and similar costs all qualify. These deductions directly reduce taxable income, increasing the likelihood of receiving a refund.

According to Kohler, “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.” The presence of Social Security becomes “irrelevant in the determination”—what matters is whether your total tax withholding exceeds actual tax liability.

Maximizing Your Tax Strategy as a Social Security Recipient

Getting a tax refund ultimately depends on your employer’s withholding accuracy and your ability to implement effective tax planning. The gap between what was withheld and what you actually owe determines refund eligibility.

For Social Security beneficiaries with multiple income streams, the solution lies in strategic planning. Meeting with a CPA or financial advisor helps ensure your specific situation receives proper analysis. They can review your W-2 income, self-employment earnings, investment income, and Social Security benefits together to identify overlooked deductions and optimize your tax position.

The bottom line: while Social Security-only recipients rarely qualify for refunds due to low income levels, those with additional earnings have genuine opportunities to structure their finances more favorably and potentially receive substantial refunds through proper tax planning and strategic use of available deductions.