Social Security Disability Insurance (SSDI) benefits provide vital support for people who are unable to work because of a disability. While the financial impact is considerable, it’s critical for recipients to understand how these taxes may impact these benefits.
The answer to whether a person has to file income taxes on SSDI or not doesn’t depend solely on the benefits they’re receiving. The recipient’s overall income plays a role in how income taxes may apply to the benefits.
When are SSDI benefits taxable?
SSDI benefits might be taxable if the person’s income exceeds established thresholds. In order to determine this, the recipient would add up half of the annual SSDI payments they receive plus the full amount of any other income. Other income sources include self-employment earnings, investment income or job wages.
The filing threshold is established annually by the Internal Revenue Service. Anyone who has a combined income over the set threshold for the year will need to file an income tax return. For the 2024 filing year, the thresholds are as follows:
- $0 for filers who lived with a spouse during part of the tax year but are filing separate returns
- $25,000 for filers who are filing single, qualifying surviving spouse, head of household or married filing separate returns if they didn’t live with their spouse at all during the filing year
- $32,000 for filers who are filing married filing a joint return
Some SSDI payments may have income tax withheld, which will be noted on the SSA-1099 form. If this is the case, it may be beneficial to file taxes even if the combined income limit is below the established threshold.