July Social Security checks may drop

The Social Security Administration (SSA) sends out benefit checks to about 70 million Americans each month. The amount each person gets varies. It is based on factors such as their earnings while working and the date they first claimed Social Security benefits. However, for July, some people may find that their checks are lower than expected. This is because of a new policy from the Internal Revenue Service (IRS). According to Gallup surveys conducted over the last 23 years, approximately 80% to 90% of retirees rely on their monthly Social Security benefits to cover essential expenses. Therefore, it’s essential to know exactly how much you will receive each month. A sudden drop could lead to financial difficulties. The chance of receiving a lower check in July is tied to new IRS rules that took effect earlier this year. These new tax rules won’t affect all Social Security recipients. But they will impact specific groups, like: – Retirees who have federal taxes taken out of their Social Security benefits. – People who have other sources of taxable income (like pensions or IRA withdrawals). – Those in higher tax brackets because of their adjusted gross income (AGI). It’s essential to note that individuals receiving Supplemental Security Income (SSI) won’t be affected by these tax withholdings. That’s because Social Security Income (SSI) is not taxable. Due to these new IRS policies, more people will have taxes automatically deducted from their paychecks. But this only applies to those who make more than a certain amount.

Impact of IRS rules on benefits

The amount withheld can range from $50 to $200. It depends on income and tax bracket. High earners could see up to 22% of their benefits withheld. In 2025, the IRS provided guidance on reporting annual tax liability for individuals who earn income from multiple sources. This placed some Social Security recipients in higher tax brackets. As a result, the SSA adjusted the amount of taxes it withheld. If you notice a lower amount in your July benefit, log in to your SSA account. Review your IRS Form W-4V. You may submit a new form or choose to stop federal tax withholding altogether. You could also talk to a tax advisor for more guidance. Keep in mind that a part of your benefit might be withheld again in later months. This depends on federal and state tax policies. The SSA makes its payments on a set date each month. However, the actual amount you receive may vary. Staying informed about changes in tax and benefit policies is crucial for managing your finances effectively. This is especially true if you rely a lot on Social Security benefits. If you are affected by the recent IRS rule changes, take steps to review and adjust your tax withholding. This can help lessen any financial impact.