Most SSDI recipients do not file federal income tax returns, but some must
Whether you file taxes depends on how much non-SSDI income you have, not on the SSDI itself. Social Security Disability Insurance payments are not taxable income for federal purposes. However, if you have earnings from work, interest, dividends, or other sources, you may cross the threshold that requires you to file.
The IRS sets a filing threshold each year based on your age and filing status. For 2024, a single person under 65 with only SSDI income does not have to file. But if that same person earned $14,600 or more from work, they must file—even though the SSDI portion remains untaxed. The threshold is higher if you are 65 or older, and different if you are married or have dependents.
Some people file even when they are not required to, because they have taxes withheld from other income or because they want to claim a refundable tax credit like the Earned Income Tax Credit (EITC). Others must file to report self-employment income or to satisfy the terms of a work incentive program.
Key Takeaways
- SSDI payments themselves are never taxable federal income, so they do not count toward your filing threshold.
- You must file if your non-SSDI income (wages, self-employment, interest, dividends) exceeds the annual threshold set by the IRS, which varies by age and filing status.
- Even if you do not have to file, you may want to file if you have taxes withheld or if you may have access to for the Earned Income Tax Credit or other refundable credits.
- Some work incentive programs require you to file taxes or report earnings to Social Security, regardless of whether the IRS requires a return.
How the IRS filing threshold works for SSDI recipients
The IRS publishes a filing threshold each year. For 2024, a single person under 65 must file if their gross income is $14,600 or more. A single person 65 or older must file if their gross income is $18,350 or more. Married couples filing jointly have a higher threshold: $29,200 if both are under 65, and $32,550 if at least one is 65 or older.
The key word is gross income. SSDI does not count. So if you received $15,000 in SSDI and earned $12,000 from part-time work, your gross income for filing purposes is $12,000—below the threshold. You would not have to file. But if you earned $15,000 from work, your gross income is $15,000, and you would have to file.
Other income that counts toward the threshold includes W-2 wages, self-employment income, interest, dividends, capital gains, rental income, and income from a business. Certain types of income, like some state disability benefits or workers' compensation, may not count, but you should check the IRS rules or ask a tax professional if you are unsure.
The threshold changes each year, usually rising slightly. The Social Security Administration publishes the current year's threshold on its website, and the IRS does as well. If you are close to the threshold, check the current year's number before deciding whether to file.
When you must file even if your income is below the threshold
Some SSDI recipients must file even though their income is below the IRS threshold. The most common reason is that they have taxes withheld from wages or other income. If your employer withheld federal income tax from your paycheck, you may need to file to get a refund of that money.
You must also file if you are self-employed and your net self-employment income is $400 or more. This applies even if your total income is below the filing threshold. Self-employment income includes money from freelance work, a small business, or gig work like driving for a rideshare service.
Some work incentive programs require you to file taxes or to report your earnings to Social Security within a certain time frame. For example, if you are using the Plan to Achieve Self-Support (PASS) or the Impairment Related Work Expenses (IRWE) deduction, you may need to file and provide documentation of your income and expenses. Check with your work incentive representative or your local Social Security office if you are using one of these programs.
Refundable tax credits and why some SSDI recipients file voluntarily
Even if you do not have to file, you may want to. The most common reason is the Earned Income Tax Credit (EITC), a refundable credit for people with low to moderate earned income. If you may have access to, the IRS will send you money—even if you owe no tax. To claim the EITC, you must file a tax return.
The EITC is available to people who work and have earned income below a certain limit. For 2024, the income limit varies depending on whether you have dependents, but it ranges from about $17,000 to $63,000. SSDI does not count as earned income for EITC purposes, so only your wages or self-employment income matter. If you earned $10,000 from work and have a may have access to child, you could receive an EITC refund of several hundred dollars.
Other refundable credits include the Additional Child Tax Credit and the American Opportunity Tax Credit (if you or a dependent are in school). These credits can result in a refund even if you owe no tax. If you think you might may have access to for any of these, filing is worth the effort.
How SSDI and other income interact on your tax return
When you file, SSDI does not appear as income on your Form 1040. You report only the non-SSDI income: wages on line 1a (from your W-2), self-employment income on Schedule C or Schedule SE, interest and dividends on Schedule B, and so on. The SSDI is straightforward not there.
However, SSDI can affect your taxes indirectly. If you have combined income above a certain threshold, a portion of your Social Security benefits (not SSDI, but regular Social Security retirement or survivor benefits) becomes taxable. This rule does not explore to SSDI, only to Social Security retirement and survivor benefits. If you receive both SSDI and regular Social Security, only the regular Social Security portion could be taxed; the SSDI portion never is.
Some states tax SSDI, though most do not. If you live in a state with an income tax, check your state's rules. A few states exempt SSDI from state income tax even if they tax other income. Your state tax return may look different from your federal return.
What to do if you are unsure whether you have to file
Start by adding up all your non-SSDI income for the year: wages, self-employment income, interest, dividends, and any other income except SSDI. Compare that total to the IRS filing threshold for your age and filing status. If you are below the threshold and have no self-employment income and no taxes withheld, you probably do not have to file.
If you are close to the threshold, or if you have self-employment income, or if you think you might may have access to for a refundable credit, file anyway. Filing when you are not required to does not hurt, and it can result in a refund or a credit you would otherwise miss.
The IRS website (irs.gov) has a tool called the Interactive Tax Assistant that can help you determine whether you must file. You can also call the IRS at 1-800-829-1040, or contact a tax professional or a free tax preparation service. Many communities offer free tax filing help through programs like VITA (Volunteer Income Tax information), which is especially useful if your income is low.
Reporting income to Social Security while working
Filing taxes and reporting earnings to Social Security are two separate things. Even if you do not have to file a tax return, you may have to report your work income to Social Security. This is especially important if you are using a work incentive program or if you are still within the Trial Work Period (TWP).
During the TWP, you can earn any amount without losing your SSDI benefits. However, you must still report your earnings to Social Security each month. After the TWP ends, you enter the Extended may be able to access Period (EEP), during which your benefits stop if your earnings exceed the Substantial Gainful Activity (SGA) level—$1,550 per month in 2024 for non-blind individuals, though this amount changes yearly.
Report your earnings to Social Security by contacting your local office or calling 1-800-772-1213. Do not assume that filing a tax return is the same as reporting to Social Security. They are separate systems, and Social Security needs to know about your work even if you do not file taxes.
Frequently Asked Questions
Do I have to file taxes if I only receive SSDI and no other income?
No. SSDI is not taxable income, so if SSDI is your only income, you do not have to file a federal tax return. You would only file if you also had wages, self-employment income, interest, dividends, or other non-SSDI income that pushed you above the annual filing threshold.
What if I earned money from work but my total income is below the filing threshold?
You still may want to file, especially if taxes were withheld from your paycheck or if you may have access to for the Earned Income Tax Credit. Filing can result in a refund. You also must file if your self-employment income was $400 or more, regardless of your total income.
Does reporting my work income to Social Security count as filing taxes?
No, they are separate. You report work earnings to Social Security to protect your benefits and to comply with work incentive rules. You file taxes with the IRS to report income and claim credits or deductions. You may need to do both, or just one, depending on your situation.
Can SSDI affect whether my Social Security retirement benefits are taxed?
SSDI itself is never taxed. However, if you receive both SSDI and regular Social Security retirement benefits, the retirement portion could be taxed if your combined income is high enough. The SSDI portion would still be tax-free. Check with a tax professional if you receive both types of benefits.
Where can I find the current year's filing threshold?
The IRS publishes the filing threshold each year on irs.gov. You can also find it on the Social Security Administration website or by calling the IRS at 1-800-829-1040. The threshold usually increases slightly each year to account for inflation.