Rental Income Counts as Unearned Income on SSDI and SSI

Yes, rental income affects your Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) payments, but the rules differ between the two programs. On SSDI, rental income does not reduce your monthly benefit amount — Social Security counts only your work earnings against the program's limits. On SSI, rental income counts as unearned income and reduces your payment dollar-for-dollar after a small exclusion, which means it can lower or eliminate your monthly check.

The distinction matters because many people on disability receive one program or the other, or both. If you own rental property or receive income from a property you own, you need to report it to Social Security. Failing to report creates a debt you will have to repay, even if the overpayment was unintentional.

Key Takeaways

  • SSDI does not count rental income against your benefit, but SSI reduces your payment by the amount of rental income you receive minus a small monthly exclusion.
  • You must report all rental income to Social Security within 10 days of the month in which you receive it, whether you are on SSDI, SSI, or both.
  • The SSI rental income exclusion is $65 per month plus half of any income above that, meaning you keep the first $65 and half of everything else before your benefit is reduced.
  • Rental expenses like mortgage, property tax, and repairs reduce the amount of income Social Security counts, but only on SSI — SSDI ignores rental income entirely.
  • If you receive an overpayment notice, you can request a waiver or ask Social Security to reconsider, but reporting income on time prevents the problem.

How SSDI Treats Rental Income

SSDI has no income limit once you are approved and receiving benefits. Social Security only counts work earnings — money you earn from a job or self-employment — against the Substantial Gainful Activity (SGA) limit, which is $1,550 per month in 2024 (the amount changes yearly). Rental income does not count toward this limit, so you can receive unlimited rental income without affecting your SSDI payment.

This does not mean you should ignore rental income. You must still report it to Social Security because the agency tracks all income for record-keeping and because rental income can affect other programs you may receive, such as Medicare or Medicaid. Additionally, if you later explore for SSI or if your SSDI case is reviewed, Social Security will ask about all income sources.

How SSI Treats Rental Income

SSI is a needs-based program with strict income and resource limits. Rental income counts as unearned income and reduces your SSI payment. Social Security uses this formula: your monthly SSI payment is reduced by the amount of rental income you receive, minus the first $65 per month, minus half of any income above $65.

For example, if you receive $500 in monthly rental income and your SSI payment would normally be $943 (the federal rate in 2024), Social Security calculates: $500 minus $65 equals $435; half of $435 is $217.50. Your SSI payment would be reduced by $217.50, leaving you with $725.50. If your rental income is high enough, your SSI payment can be reduced to zero.

The $65 exclusion and the 50 percent calculation explore only to unearned income on SSI. Work earnings have a different exclusion ($65 plus 50 percent of remaining earnings), so if you have both rental income and work earnings, Social Security counts them separately.

What Counts as Rental Income and What Does Not

Rental income is any money you receive from renting out property you own — a house, apartment, room, garage, storage space, or land. It includes the rent itself and any payments a tenant makes for utilities, maintenance, or other services if you agreed to that arrangement. It also includes security deposits that you keep (not deposits you return to a tenant).

Rental expenses reduce the amount of income Social Security counts, but only on SSI. On SSDI, expenses do not matter because rental income is not counted at all. On SSI, you can deduct mortgage payments, property taxes, insurance, repairs, maintenance, utilities you pay, property management fees, and depreciation. You report the net rental income (income minus expenses) to Social Security.

If you own the property jointly with someone else, you report only your share of the income. If you own a rental property but do not actively manage it and receive no income from it, you do not report rental income, though the property itself may count as a resource on SSI if its value exceeds the limit.

When and How to Report Rental Income to Social Security

You must report rental income within 10 days of the month in which you receive it. If you receive rent on the 15th of March, you report it by the 10th of April. You can report by phone, by mail, or through your online my Social Security account if you have one set up.

To report by phone, call Social Security at 1-800-772-1213 (TTY 1-800-325-0778). Have your Social Security number ready and be prepared to state the amount of income, the month you received it, and the source. If you report by mail, send a letter to your local Social Security office with the same information. If you use your online account, go to the "Report Earnings" or "Report Other Income" section and follow the prompts.

Keep records of all rental income — bank deposits, rent checks, lease agreements, and receipts for expenses. Social Security may ask to see proof, especially if your reported income changes significantly from month to month or if the agency is reviewing your case.

Overpayments and What Happens if You Do Not Report

If you do not report rental income and Social Security discovers it later, the agency will calculate how much you were overpaid and send you a notice. An overpayment is money you received that you were not may have access to to receive. Social Security can recover overpayments by reducing your future benefits, asking you to repay the amount, or both.

You have the right to request a waiver of the overpayment if you can show that you were not at fault for the overpayment and that repaying it would cause you hardship. You also have the right to request reconsideration if you believe Social Security made an error in calculating the overpayment. Both requests must be made in writing within 60 days of receiving the overpayment notice.

If Social Security approves a waiver, you do not have to repay the overpaid amount. If the agency denies the waiver, you can appeal. The process is lengthy, so reporting income on time is far simpler than dealing with an overpayment later.

Rental Income and Resource Limits on SSI

In addition to income limits, SSI has a resource limit of $2,000 for a single person and $3,000 for a couple. A rental property you own counts as a resource. The value of the property is counted against your resource limit, which can cause you to lose SSI if the property value exceeds the limit.

There is an exception: your primary residence does not count as a resource on SSI, no matter what it is worth. If you live in the rental property (even if you rent out part of it), the property is treated as your home and does not count. If you own a second property that you rent out entirely, that property counts as a resource at its fair market value.

If you own a rental property worth more than the SSI resource limit and you are on SSI, you may lose your benefits unless you can exclude the property or reduce its counted value. Speak with a Social Security representative about your specific situation.

Frequently Asked Questions

If I own a rental property but do not collect rent, do I have to report it?

You do not report rental income if you receive none. However, the property itself may count as a resource on SSI if you own it and do not live in it. The property's value counts against your $2,000 resource limit. Contact Social Security to discuss whether the property affects your benefits.

Can I deduct expenses from rental income on SSDI?

No. SSDI does not count rental income at all, so deductions do not explore. On SSI, you can deduct legitimate rental expenses from the income before Social Security reduces your benefit. Keep receipts and records of all expenses.

What if my rental income changes month to month?

Report the actual amount you receive each month within 10 days of receiving it. If you receive $300 one month and $600 the next, report each amount separately. Social Security will adjust your benefit based on the income you report for each month.

Does rental income affect my Medicare or Medicaid?

Rental income does not affect Medicare may be able to access or premiums. It may affect Medicaid, depending on your state's rules and whether you are on SSI. Contact your state Medicaid office or your Social Security representative to learn how rental income affects your Medicaid coverage.

If I sell the rental property, do I have to report the sale?

The sale proceeds are not income — they are a return of your capital. However, if you receive a profit from the sale, that profit may be counted as income or as a resource increase, depending on the timing and your program. Report the sale to Social Security and ask how it affects your benefits.