Most SSDI recipients do not have to file a federal tax return
Social Security Disability Insurance (SSDI) payments are not taxable income on their own. This means if SSDI is your only source of income, you will not owe federal income tax and do not have to file a return with the IRS.
However, the rule changes if you have other income. If you earn money from work, receive interest or dividends, or have other types of income alongside your SSDI, you may be required to file. The IRS looks at your total income, not just your SSDI amount.
State income tax rules vary. Some states do not tax SSDI at all, while others may tax it under certain conditions. You will need to check your specific state's rules or contact your state tax authority to know whether you owe state tax.
Key Takeaways
- SSDI payments themselves are never taxable, so you do not owe federal tax on the SSDI amount alone.
- You must file a federal return if your total income from all sources exceeds the IRS threshold for your filing status and age.
- Work income, interest, dividends, and other earnings count toward the threshold that determines whether you must file.
- State tax rules on SSDI vary by location, so check your state's requirements or speak with a tax professional familiar with your state.
- Filing a return when you are not required to can sometimes result in a refund, so it may be worth doing even if you do not have to.
When you must file even though SSDI is not taxable
The IRS sets a filing threshold — a minimum income level that triggers a filing requirement. For 2024, the threshold depends on your age and filing status. If you are single and under 65, you must file if your gross income is $14,600 or more. If you are 65 or older, the threshold is $18,350. These numbers change each year.
Gross income includes wages from work, self-employment income, interest, dividends, capital gains, and rental income — but not SSDI. So if you earned $10,000 from part-time work and received $15,000 in SSDI, your gross income is $10,000, and you would not be required to file (assuming you are under 65 and single).
If you are married filing jointly, the thresholds are higher. A married couple where both are under 65 must file if their combined gross income is $29,200 or more. Check the IRS website or a tax professional for your exact situation, since thresholds shift annually.
Work income and the earnings test
If you work while receiving SSDI, you have two separate concerns: the earnings test (which affects your SSDI payments) and the tax filing requirement (which affects what you owe the IRS).
The earnings test is a Social Security rule, not a tax rule. In 2024, Social Security reduces your SSDI payment by $1 for every $2 you earn above $23,400 per year. This reduction happens whether or not you file taxes. The earnings test does not determine whether you owe taxes — your actual income does.
For tax purposes, any wages you earn are counted as gross income. Even if the earnings test reduces your SSDI payment, you still report the full wages you earned to the IRS. This is why someone with modest work income might owe no tax but still see their SSDI payment reduced.
Interest, dividends, and other income
If you have a savings account, investment account, or rental property, the income from these sources counts toward your filing threshold. Interest from a bank account, dividends from stocks, and rental income are all taxable and must be reported if your total income exceeds the threshold.
You do not need to have a large amount of this income to trigger a filing requirement. Even $100 in interest combined with other income can push you over the threshold. The IRS requires you to report all sources of income together.
If you receive a 1099 form (for interest, dividends, or self-employment income) or a W-2 form (for wages), keep these documents. They show what income you reported and help you determine whether you must file.
State income tax on SSDI
Federal tax law does not tax SSDI, but state law varies. Most states follow the federal rule and do not tax SSDI. However, a few states have different rules, and some states have no income tax at all.
States that currently tax SSDI include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont. Even in these states, the tax treatment depends on your total income and filing status. Some states exempt SSDI for lower-income recipients.
If you live in one of these states or are unsure about your state's rule, contact your state's department of revenue or a tax professional. They can tell you whether you owe state tax and whether you must file a state return.
When filing might help you even if you do not have to
You are not required to file a federal return if your income is below the threshold. However, filing can sometimes put money back in your pocket through refundable tax credits.
The Earned Income Tax Credit (EITC) is a refundable credit for people with low to moderate work income. If you work and your income is low enough, you may receive money back from the IRS even if no tax was withheld from your pay. SSDI does not count as earned income for this credit, but wages do.
Similarly, if you had taxes withheld from wages or other income, filing a return may result in a refund. Even though you do not owe tax, the IRS may owe you money. Filing is the only way to claim it.
How to find out what you owe
The simplest way to know whether you must file is to add up all your income from all sources except SSDI and compare it to the IRS threshold for your age and filing status. The IRS publishes these thresholds each year on its website.
If you are unsure about what counts as income or whether you meet the threshold, a tax professional or a free tax preparation service can help. Many communities offer free tax preparation through programs like VITA (Volunteer Income Tax information), which serves people with low to moderate income.
You can also call the IRS at 1-800-829-1040 to ask whether you must file. Have your income documents ready when you call.
Frequently Asked Questions
Do I have to file taxes if SSDI is my only income?
No. SSDI is not taxable income, so if it is your only source of income, you do not owe federal income tax and do not have to file a federal return. However, check your state's rules, as a few states tax SSDI under certain conditions.
What if I earned money from work last year?
Work income counts toward the IRS filing threshold. Add your wages to any other income (interest, dividends, rental income) and compare the total to the threshold for your age and filing status. If the total exceeds the threshold, you must file.
Will filing taxes affect my SSDI payments?
Filing a tax return does not change your SSDI payments. However, earning work income may reduce your SSDI through the earnings test. This is separate from taxes. You can owe no tax and still have your SSDI reduced if you earn above the earnings test limit.
Can I get a refund if I do not have to file?
Yes. If you had taxes withheld from wages or are due a refundable credit like the Earned Income Tax Credit, filing a return can result in a refund even if you were not required to file. Filing is the only way to claim the refund.
What documents do I need to file?
You will need a Social Security number, proof of income (W-2 forms for wages, 1099 forms for interest or self-employment income), and information about any deductions or credits you claim. You do not need to report your SSDI amount on your tax return.