My spouse’s Social Security checks are payable directly to the nursing home she’s in. Are the payments taxable income on our joint return?

Social Security benefits may be tax free or includible in gross income at 50% or 85%. This depends on a couple’s income, Social Security benefits, and tax-exempt interest. The fact that the benefits are payable to a third party does not change the tax result; the Social Security checks are being used for the taxpayer’s benefit.