Is Social Security Disability Taxable?

Social Security Disability Insurance (SSDI) benefits are taxable if they exceed a certain threshold when put together with your other income. You might have to pay federal taxes this tax season on your benefits if your single or combined income is above a certain amount.

Note that Georgia does not tax SSDI benefits, so you do not have to pay taxes to the state for these benefits. An Atlanta Social Security Disability lawyer can give you more information about the taxability of SSDI benefits.

Are Social Security Disability Benefits Taxable?

The taxability of your regular and disability benefits can vary based on a variety of factors, including your filing status (such as your marital status, combined income amount, if you are married filing jointly, etc.).

The taxability of your benefits will depend on your total yearly income. You might have to pay federal taxes if your income passes the Internal Revenue Service (IRS) income threshold for taxation:

• $25,000 if you’re single or married, filing separately
• $32,000 if you’re married, filing jointly

Your total income includes half of your disability benefits, tax-exempt interest, and other yearly income sources. If you are married and filing jointly, you must include your spouse’s annual salary as well. If the total married filing income goes over the above number, you might pay federal income taxes on your benefits.

If you’re in a more substantial income bracket, 85% of your benefits could be considered taxable income. We can help you understand income limits, so don’t wait to reach out to an attorney for help.

Most people on SSDI do not have to pay taxes on their benefits. That’s because they already have little or no additional household income.

To even qualify for SSD, you must have a low income or no sources of income. For more information on income tax liability regarding SSDI, contact a lawyer for help.

Is Supplemental Security Taxable Income?

Supplemental security income (SSI) is another program from the SSA. It is different from Social Security Disability. SSI provides benefits to:

• Disabled individuals with limited income
• Individuals aged 65 and older with limited income (but not disabled)

Some people can receive both SSDI and SSI. No matter what, the federal government does not consider SSI payments as taxable income.

Reporting Your Social Security Disability Income

Social Security can include:

• Disability benefits
• Survivor benefits
• Retirement benefits

You will have to report Social Security benefits when you file your federal taxes. You’ll find the total in Box 5 of Form SSA-1099. You will need to report the amount on line 5a of Form 1040 or Form 1040-SR. You’ll add the taxable part of your benefits on line 5b of the same form.

A tax professional can give you more information about how to report your benefits, so you comply with all tax laws. 

Do All States Tax Social Security Disability?

No. Most states do not make Social Security Disability benefits taxable. The following states still tax disability benefits:

• Colorado
• Connecticut
• Kansas
• Minnesota
• Montana
• Nebraska
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

Residents of Georgia should not have to pay state taxes for SSDI benefits. However, if you have additional income, you may have to pay taxes on those earnings. 

Talk to a local Social Security Disability Insurance lawyer about the laws for your state. In some places, the tax rules are close to the Internal Revenue Service’s regulations. A lawyer or tax professional can determine if any of your Social Security benefits have a taxable portion.

What About Back Payments for Social Security Disability?

You might get “back payments” for the time you spent disabled before getting benefits. If a loved one died, you could also get a one-time death payment. These payments might increase your annual income level for the year.

If a lump-sum payment increases your income, you might have to pay more taxes. However, you may be able to apply some of the Social Security benefits to previous years. That could help lower your taxable benefits.

You can learn more about how far back SSDI will pay and how the government calculates SSDI with help from a legal professional. 

Will You Have to Pay Taxes on Your Social Security Benefits?

Probably not — unless you have a higher income. The application process for Social Security Disability is notoriously rigorous. The Social Security Administration (SSA) won’t approve benefits if you are earning too much.

Those on SSDI apply for it because they need assistance. They are rarely in a higher income bracket. However, if you are concerned, consult a lawyer about your options.

How Can You Get Help Understanding SSD Taxes?

A Social Security Disability Insurance lawyer can help you. They can determine whether your benefits are taxable. Your lawyer can also help with your application and answer questions about the process.

How Does Social Security Disability Work?

The SSA provides disability benefits. People with disabilities will qualify if:

• You have a medical condition that prevents you from working.
• You have paid enough into Social Security taxes.

You must meet the SSA’s definition of a disability. The SSA will consider if:

• You’re currently working at all.
• You have a “severe” condition.
• Your condition is disabling.
• You can do any work.

Your application will go through a five-step process. If you qualify at each step, you will receive Social Security benefits. In 2020, if you make more than $1,260 a month, you won’t be eligible. These limits on eligibility represent another reason that those on SSDI are rarely taxed.

The SSA must also confirm that you have enough work credits. You earn work credits through taxes on your income. Most adults need 40 work credits to qualify. You must have earned 20 of those credits in the 10 years before your disability.

In 2020, one work credit is worth $1,410 in wages. The exact amount changes from year to year. You can earn up to four work credits per year.

Talk to a Social Security Disability Lawyer for Free Today

So, is Social Security Disability taxable? Some people have to pay federal taxes on these benefits. You should not have to pay state taxes in Georgia.

If you have questions about Social Security Disability or other social insurance programs, contact John Foy & Associates. Our SSD lawyers have over 25 years of experience. We can help you understand eligibility requirements or build or appeal your claim. We know how desperately SSD applicants need benefits.

You should get the income you qualify to receive. At John Foy & Associates, the consultation is 100% FREE. We also do not charge a fee unless you get paid. You can get the help you need now — and at no risk.