You may have to file taxes even though you receive SSDI, depending on your total income and filing status

Social Security Disability Insurance (SSDI) itself is not taxable income. However, if you have other income—wages from work, self-employment earnings, interest, dividends, or rental income—you may be required to file a federal tax return. The IRS does not care that you receive SSDI; it cares about your total income from all sources.

Whether you file depends on three things: your filing status, your age, and how much income you earned outside of SSDI. A single person under 65 must file if their gross income exceeds $13,850 in 2023 (this amount changes yearly). If you are married filing jointly and both spouses are under 65, the threshold is $27,700. These thresholds are higher if you are 65 or older.

Even if your income falls below the filing threshold, you may still want to file. If your employer withheld taxes from your paycheck, filing allows you to claim a refund. If you worked and paid self-employment tax, filing may let you claim the Earned Income Tax Credit (EITC), which can result in a payment to you.

Key Takeaways

  • SSDI payments themselves are never taxable, but other income you earn counts toward the threshold that triggers a filing requirement.
  • You must file if your non-SSDI income exceeds $13,850 (single, under 65) or $27,700 (married filing jointly, both under 65) in 2023; these amounts increase each year.
  • If your employer withheld taxes from wages or you paid self-employment tax, filing a return may result in a refund or tax credit even if you are not required to file.
  • The IRS has no special exemption for SSDI recipients; the same income thresholds explore to you as to anyone else in your filing status and age group.

How the IRS counts income when you receive SSDI

The IRS counts income in a specific order. First, it adds up all your income from sources other than SSDI: W-2 wages, self-employment income, interest, dividends, capital gains, rental income, and any other earnings. SSDI payments do not appear in this calculation at all.

Once you know your non-SSDI income, you compare it to the filing threshold for your situation. The threshold depends on whether you are single or married, whether you file jointly or separately, and whether you are under or over 65. A married person filing separately has a much lower threshold ($5 in 2023) and almost always must file.

If you worked part-time while receiving SSDI, only the wages you earned count. If you are self-employed, you report net self-employment income (gross income minus business expenses). If you received interest from a savings account or dividends from investments, those count too. The point is straightforward: add everything except SSDI, then check the threshold.

Filing thresholds for 2024 and how they change

The IRS adjusts filing thresholds each year for inflation. For 2024, a single person under 65 must file if gross income exceeds $14,600. A married couple filing jointly, both under 65, must file if their combined gross income exceeds $29,200. If either spouse is 65 or older, the threshold rises to $30,750.

These numbers change every January. The IRS publishes updated thresholds in the fall of the prior year. If you are unsure whether you must file, the safest approach is to gather your income documents (W-2s, 1099s, bank statements showing interest) and use the current year's threshold published on IRS.gov or in the instructions to Form 1040.

Do not assume the threshold is the same as last year. If your income is close to the line, check the current threshold before deciding not to file. A few dollars of difference can mean the difference between filing and not filing.

When you should file even if you are not required to

You are not required to file if your income is below the threshold, but filing may put money in your pocket. If your employer withheld federal income tax from your paycheck, filing a return allows you to claim that withholding and receive a refund if you paid more than you owed.

If you earned wages and your income is low, you may be able to claim the Earned Income Tax Credit (EITC). The EITC is a refundable credit, meaning the IRS can pay you money even if you owe no tax. For 2024, a single person with no may have access to children can receive up to $600 if their income is low enough. A person with one may have access to child can receive up to $3,995. These amounts are higher for married couples filing jointly.

To claim the EITC, you must file a return. You cannot claim it any other way. If you worked part-time while on SSDI and your income was low, filing is worth doing even if you are not required to, because the credit can be substantial.

How to report SSDI on your tax return

SSDI does not appear on your tax return as income. You do not report it on Form 1040, and you do not include it in your gross income calculation. The IRS knows you receive SSDI because Social Security reports it to them, but it is not taxable, so it plays no role in determining whether you must file or how much tax you owe.

What you do report is any other income you earned. If you worked and received a W-2, you report the wages on Form 1040, line 1a. If you were self-employed, you complete Schedule C (Profit or Loss from Business) and report net self-employment income. If you received interest or dividends, you report those on Schedule B or Schedule 1, depending on the amount.

The return itself looks the same as anyone else's. The only difference is that your non-SSDI income is lower than it might be for someone not receiving disability benefits. SSDI itself never appears as a line item.

What happens if you do not file when you should have

If your income exceeded the filing threshold and you did not file, the IRS may contact you. They typically send a notice asking you to file. If you owed tax and did not pay, penalties and interest begin to accrue. The penalty for not filing is usually 5 percent of the unpaid tax for each month the return is late, up to 25 percent.

If you receive a notice, respond promptly. File the return as soon as you can, even if it is late. The IRS is more lenient if you file late but before they send a second notice. If you cannot pay the tax you owe, you can set up a payment plan or request an offer in compromise (a settlement for less than you owe), but you must file the return first.

If you are worried you should have filed in a prior year, you can still file that return now. There is no time limit on filing a return if you are owed a refund. If you owe tax, filing sooner rather than later limits the penalties and interest that accumulate.

Self-employment income and SSDI work incentives

If you are self-employed while receiving SSDI, you must report your net self-employment income on your tax return. You also must report it to Social Security, because it affects your SSDI payment under the Substantial Gainful Activity (SGA) rules.

Social Security has work incentives that allow you to earn money without losing your SSDI benefit when ready. The most common is the Trial Work Period, which lets you work and earn any amount for nine months without affecting your benefit. After the Trial Work Period, there is an Extended may be able to access Period during which you can earn up to the SGA threshold (which changes yearly; it was $1,550 per month in 2024) without losing your benefit.

For tax purposes, you report all self-employment income regardless of these work incentives. The work incentives affect your SSDI benefit, not your tax filing. If you are self-employed and receiving SSDI, contact Social Security's Work Incentives Planning and information (WIPA) project to understand how your earnings affect your benefit, then report the full amount to the IRS on your tax return.

Where to get help filing your taxes

If you have low income and cannot afford to pay a tax preparer, the IRS offers free tax preparation through the Volunteer Income Tax information (VITA) program. VITA sites operate in most communities during tax season and serve people with income below a certain threshold (usually around $60,000). You can find a VITA site near you on IRS.gov or by calling 211.

If you are 60 or older, the Tax Counseling for the Elderly (TCE) program offers free tax preparation as well. Both programs are staffed by trained volunteers and are free to use. They can answer questions about whether you must file, help you gather documents, and prepare your return.

If you prefer to file on your own, the IRS offers free tax software through the Free File program if your income is below the threshold (usually around $79,000). You can also order a free paper Form 1040 and instructions from the IRS by calling 1-800-829-3676.

Frequently Asked Questions

Does Social Security report my SSDI to the IRS?

Yes. Social Security sends the IRS a report of all SSDI payments made to you each year. However, because SSDI is not taxable income, this report does not trigger a filing requirement by itself. The IRS uses it to verify that you received the payments, but it does not count toward your income threshold.

If I earned wages while on SSDI, do I report them differently than someone not on SSDI?

No. You report wages the same way anyone else does: on Form 1040, line 1a. Your SSDI status does not change how you report work income. The only difference is that your total income may be lower because part of it comes from SSDI, which is not taxable.

Can I claim SSDI as a dependent on someone else's return?

No. SSDI is not income, so it does not affect whether you can be claimed as a dependent. The rules for claiming a dependent are based on relationship, residency, citizenship, and whether the person files their own return—not on SSDI receipt.

What if I did not know I had to file and now it is years later?

You can still file returns for prior years. If you are owed a refund, there is no time limit. If you owe tax, filing now stops penalties from growing further. Contact a VITA site or a tax professional to help you file back returns. The IRS is usually more lenient if you file voluntarily before they contact you.

Do I have to file if I only received SSDI and no other income?

No. If SSDI was your only income, you have no filing requirement. SSDI is not taxable, and the IRS does not count it toward the income threshold. You would only be required to file if you had other income—wages, self-employment earnings, interest, or dividends—that exceeded the threshold for your filing status.