Social Security Disability Insurance is a lifeline for the disabled in terms of financial support, but do you know that a portion of your disability or retirement benefit may be taxable? Do you owe taxes on such benefits? The answer lies in your total income for the year.
Let’s discuss how SSDI is taxed, what income limits apply, and how much of your benefit is potentially taxable.
Tax forms
The SSA sends Form SSA-1099 every year. It is also known as the Social Security Benefit Statement. This keeps a record of your SSDI benefits and informs you whether you have to pay taxes on these benefits.
Although the SSI benefits are nontaxable, the SSDI may be subjected to taxation depending on your income level.
Income Thresholds
The benefits you receive through SSDI are taxable when your total income-that is, your SSDI benefit amount, half of it plus other sources of income such as wages, investment earnings, or tax-exempt interest-reaches the base amount set by the IRS for your filing status.
| Filing Status | Taxable Income Threshold |
|---|---|
| Single, Head of Household, Qualifying Surviving Spouse | Over $25,000 |
| Married Filing Jointly | Over $32,000 |
| Married Filing Separately (lived apart from spouse all year) | Over $25,000 |
| Married Filing Separately (lived with spouse at any time in the year) | $0 (All SSDI benefits may be taxable) |
If you file jointly, then your combined income, both yours and your spouse’s, determines taxability.
Taxable
The portion of your SSDI benefits that may be taxed depends on your total income:
| Filing Status | Income Range | Taxable Percentage |
|---|---|---|
| Single, Head of Household, Qualifying Surviving Spouse | $25,000 – $34,000 | Up to 50% |
| Single, Head of Household, Qualifying Surviving Spouse | Over $34,000 | Up to 85% |
| Married Filing Jointly | $32,000 – $44,000 | Up to 50% |
| Married Filing Jointly | Over $44,000 | Up to 85% |
If your total income is less than the exemption, your SSDI benefits are nontaxable.
Extra Income
SSDI is designed for people who have a disability, so you’re likely to need limited incomes to be eligible. But if you have other incomes coming in from:
- Dividends on investments
- Tax-exempt interest
- Spousal income
…in taxes on your SSDI.
This can also be good to know beforehand so you’re not blindsided when tax season arrives.
Time of Year
For 2024 tax filing, the due dates are as follows
| Tax Deadline | Who It Applies To |
|---|---|
| April 15, 2025 | General taxpayers in the U.S. |
| June 16, 2025 | Americans living abroad |
If you received SSDI and suspect that you may owe taxes you should speak with a professional tax agent to make sure that you are following IRS regulations.
FAQs:
Do I have to pay taxes on SSDI?
It depends on your total income. If it exceeds the IRS thresholds, SSDI may be taxable.
Is SSI taxable like SSDI?
No, Supplemental Security Income (SSI) is not taxable.
What is the tax threshold for SSDI?
For single filers, it’s $25,000. For married joint filers, it’s $32,000.
