SSDI payments and federal income tax reporting

Whether you report your SSDI on your tax return depends on whether you have other income and your filing status. The Social Security Administration sends you a Form SSA-1099 each January showing the total SSDI you received in the previous year. You use this form to determine what goes on your federal tax return — but not all SSDI recipients have to file a return at all.

The IRS has specific income thresholds that determine whether you must file. If your only income is SSDI, you generally do not have to file a federal return. However, if you have wages, self-employment income, or other earnings alongside SSDI, the rules change. Up to 85 percent of your SSDI can become taxable income depending on your total income level.

The calculation is complex because it uses something called combined income, which includes your SSDI plus half your SSDI plus any other income you received. This number determines how much of your benefit is subject to federal tax.

Key Takeaways

  • You receive a Form SSA-1099 each January showing your total SSDI for the previous year, which you use to complete your tax return.
  • If SSDI is your only income, you typically do not have to file a federal tax return at all.
  • If you have wages or other income, you must calculate your combined income to determine whether any SSDI becomes taxable.
  • Up to 85 percent of your SSDI can be taxable depending on your combined income and filing status.
  • State tax rules vary — some states do not tax SSDI at all, while others follow federal rules or have their own thresholds.

When you must file a return with SSDI income

You must file a federal return if your combined income exceeds certain thresholds. For a single filer in 2024, that threshold is $25,550. For married filing jointly, it is $32,200. For married filing separately, it is $12,550. These amounts change each year based on inflation.

Combined income is calculated as: your adjusted gross income plus nontaxable interest plus half your SSDI. If that total exceeds the threshold for your filing status, you must file. You do not have to file based on SSDI alone, but you do have to file if you have W-2 wages, 1099 income, or other earnings that push you over the threshold.

Even if you are below the threshold, you may want to file anyway if you have taxes withheld from other income sources or if you are due a refund. The IRS does not automatically refund overpayment of taxes unless you file.

How SSDI becomes taxable income

The IRS uses a two-tier system to determine how much of your SSDI is taxable. The first tier applies if your combined income is between $25,000 and $34,000 (single) or $32,000 and $44,000 (married filing jointly). In this range, up to 50 percent of your SSDI can be taxable.

The second tier applies if your combined income exceeds $34,000 (single) or $44,000 (married filing jointly). In this range, up to 85 percent of your SSDI can be taxable. The exact amount depends on how far above the threshold you are.

Example: A single filer with $20,000 in wages and $15,000 in SSDI has a combined income of $20,000 plus half of $15,000 ($7,500), which equals $27,500. This exceeds the first threshold of $25,000 by $2,500. Up to 50 percent of the SSDI ($7,500) could be taxable, but only up to the amount of the excess ($2,500). So $2,500 of the SSDI becomes taxable income.

Form SSA-1099 and what it shows

Social Security mails Form SSA-1099 to you by January 31 each year. Box 1 shows the total SSDI you received in the previous calendar year. Box 2 shows any federal income tax withheld from your payments. Box 5 shows any voluntary federal tax withholding you requested.

You need this form to complete your tax return accurately. If you do not receive it by early February, you can request a replacement by calling Social Security at 1-800-772-1213 or by visiting your local Social Security office. You can also create a my Social Security account online to view and read your Form SSA-1099.

Keep your Form SSA-1099 with your tax records. The IRS receives a copy, so the amounts must match what you report on your return.

Requesting federal tax withholding from SSDI

You can ask Social Security to withhold federal income tax from your SSDI payments each month. This is voluntary and can help you avoid owing taxes at the end of the year. You request withholding by completing Form W-4V and submitting it to Social Security.

You can withhold 7 percent, 10 percent, 12 percent, or 22 percent of your monthly benefit. Social Security does not offer custom withholding amounts. If you want a different percentage, you must choose the closest option or request no withholding and make estimated tax payments to the IRS instead.

You can change or stop withholding at any time by submitting a new Form W-4V. Changes take effect the following month. If you have questions about how much to withhold, a tax professional or the IRS can help you calculate based on your total income.

State tax treatment of SSDI

Thirteen states do not tax SSDI at all: Colorado, Delaware, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, North Carolina, Ohio, Pennsylvania, and South Carolina. If you live in one of these states, you do not report SSDI on your state return.

Other states follow federal rules — if SSDI is taxable on your federal return, it is taxable on your state return. Some states have their own thresholds that differ from federal rules. A few states tax SSDI only if your income exceeds a certain amount, even if it is taxable federally.

Check your state's tax agency website or contact them directly to confirm the rules for your state. State rules change, and some states have recently modified their SSDI tax treatment.

Reporting SSDI on your tax return

If you must file a federal return and have taxable SSDI, you report it on Form 1040. The taxable portion of your SSDI goes on line 5b. You also include the total SSDI you received (from Box 1 of your Form SSA-1099) on line 5a for reference.

If you use tax software, it will walk you through the combined income calculation and determine the taxable amount for you. If you file by hand or with a tax professional, they will use the worksheets in the Form 1040 instructions to calculate how much is taxable.

You must report the income even if no tax is owed on it. Reporting it accurately prevents delays or notices from the IRS.

Frequently Asked Questions

Do I have to file a tax return if I only receive SSDI?

No. If SSDI is your only income, you do not have to file a federal return. You only file if your combined income (SSDI plus half your SSDI plus other income) exceeds the threshold for your filing status.

What if I have wages and SSDI — how do I know if any SSDI is taxable?

Add your wages, half your SSDI, and any other income. If that total exceeds $25,000 (single) or $32,000 (married filing jointly), some SSDI is taxable. Use the IRS worksheets in the Form 1040 instructions or tax software to calculate the exact amount.

Can I avoid paying taxes on SSDI by requesting withholding?

Withholding does not change whether SSDI is taxable — it just spreads the tax payment across the year instead of owing it all at tax time. If your SSDI is taxable, you owe the tax whether you withhold or not.

What if I did not receive my Form SSA-1099?

Call Social Security at 1-800-772-1213 or visit your local office to request a replacement. You can also log into your my Social Security account online to view and read it. You need this form to file your return accurately.

Does my state tax SSDI the same way the federal government does?

No. Thirteen states do not tax SSDI at all. Other states follow federal rules or have their own thresholds. Check your state tax agency website to confirm the rules where you live.