Which of the following statements about taxation of Social Security benefits is NOT true?

The statement that Social Security benefits are always taxable is not true. In fact, the taxation of Social Security benefits is contingent on the recipient's combined income, which includes adjusted gross income, tax-exempt interest, and half of the Social Security benefits. If an individual's income is below a certain threshold, their Social Security benefits may not be taxable at all.

When a person's combined income exceeds the specified limits, then a portion of their benefits may become subject to federal income tax. The maximum amount that can be taxed is up to 85% of the benefits, depending on the individual's overall income. Thus, there are scenarios where these benefits are completely tax-free, further highlighting that the assertion about benefits always being taxable is inaccurate.

The other statements accurately reflect the rules surrounding the taxation of Social Security benefits. There are established income thresholds that determine whether, and to what extent, benefits are taxed, as well as guidelines indicating that individual earnings can indeed influence the total benefit amount received.