Social Security benefits include disability payments, but do you have to pay taxes on SSDI? The answer depends on your total income for the year. The Social Security Administration (SSA) issues Form SSA-1099, a Social Security Benefit Statement, to help beneficiaries determine whether they owe taxes on their SSDI payments.
While Supplemental Security Income (SSI) is not taxable, SSDI benefits may be subject to taxes based on your income and filing status. Knowing the tax rules can help you prepare for potential tax liabilities and avoid surprises.
SSDI Benefits
SSDI benefits are taxable if your total income plus half of your SSDI benefits exceeds the IRS’s base amount for your filing status.
Base Income Thresholds
| Filing Status | Income Level That Triggers Taxation |
|---|---|
| Single, Head of Household, Qualifying Surviving Spouse | Over $25,000 |
| Married Filing Jointly | Over $32,000 |
| Married Filing Separately (Lived Apart Entire Year) | Over $25,000 |
| Married Filing Separately (Lived With Spouse) | $0 (SSDI is fully taxable) |
If you file jointly, your spouse’s income is included in determining taxability.
How Much of SSDI is Taxable?
The taxable portion of SSDI benefits depends on your total income:
Single Filers
- $25,000 to $34,000: Up to 50% of SSDI benefits may be taxable.
- Over $34,000: Up to 85% of SSDI benefits may be taxable.
Married Filing Jointly
- $32,000 to $44,000: Up to 50% of SSDI benefits may be taxable.
- Over $44,000: Up to 85% of SSDI benefits may be taxable.
If you receive additional income from sources like investment dividends, tax-exempt interest, or spousal earnings, your SSDI benefits are more likely to be taxed.
How to Report SSDI on Taxes
- Check Form SSA-1099 – The SSA sends this form annually to show the total SSDI benefits received.
- Determine Taxable Amount – Use the IRS income formula to check if you owe taxes.
- File a Tax Return – If required, report SSDI benefits on Form 1040.
Knowing SSDI tax rules can help you plan for potential taxes and avoid financial surprises. If your income is close to the taxable thresholds, consult a tax professional to look into ways to reduce tax liability.
FAQs
Do SSDI benefits count as taxable income?
SSDI benefits are taxable if your total income exceeds IRS thresholds.
How do I know if my SSDI benefits are taxable?
Check Form SSA-1099 and compare your total income to IRS base amounts.
What percentage of SSDI benefits can be taxed?
Up to 50% is taxable if income is moderate; up to 85% if income is high.
Are SSI benefits taxable?
No, Supplemental Security Income (SSI) is not subject to taxation.
How do I report SSDI on my taxes?
Use Form SSA-1099 and report it on your tax return if required.
