You may have to file taxes even though SSDI itself is not taxed

Social Security Disability Insurance (SSDI) payments are not taxable income — the federal government does not tax them, and most states do not either. But you still may have to file a tax return if you have other income. The rule depends on what else you earned that year: wages from work, interest, dividends, self-employment income, or other sources. If your total income from those sources crosses a threshold set by the IRS, you must file, even if SSDI makes up the bulk of what you live on.

The threshold changes each year and depends on your age and filing status. A single person under 65 with only SSDI and no other income does not file. A single person under 65 with $14,600 in wages, however, must file. The same person at 65 or older has a higher threshold: $18,450. If you are married filing jointly, the numbers are different again. The IRS publishes these thresholds every January, and they shift slightly each year because they are tied to inflation.

Key Takeaways

  • SSDI payments themselves are never taxed, but you must file a return if you have other income above the IRS threshold for your age and filing status.
  • The income threshold that triggers a filing requirement changes each year and is higher if you are 65 or older.
  • Wages from work, self-employment income, interest, and dividends all count toward the threshold; SSDI does not.
  • If you owe taxes on other income, you may also owe taxes on part of your SSDI if your combined income is very high — but this is rare and applies only when total income exceeds roughly $25,000 for a single filer.

How to learn about your income crosses the filing threshold

Start by adding up all your income for the year except SSDI. Include W-2 wages, 1099 self-employment income, interest from a bank account, dividends from investments, rental income, and any other money you received. Do not include SSDI, Supplemental Security Income (SSI), or most veterans' benefits.

Once you have that total, compare it to the threshold for your situation. The IRS website publishes a table each year showing thresholds by age and filing status. For 2024, a single person under 65 must file if their non-SSDI income is $14,600 or more. A single person 65 or older must file if their non-SSDI income is $18,450 or more. If you are married filing jointly and both spouses are under 65, the threshold is $29,200. If one spouse is 65 or older, it is $30,750. If both are 65 or older, it is $32,300. These numbers will shift in 2025 and beyond.

If you are unsure whether you cross the threshold, file anyway. Filing when you are not required to does not hurt you, and it may help — if you had taxes withheld from wages, you may get a refund.

What happens if you work while on SSDI

Work incentives allow SSDI beneficiaries to earn money without losing benefits when ready. The most common is the Trial Work Period (TWP), which lets you work and earn any amount for nine months without affecting your SSDI check. After the TWP ends, you enter the Extended may be able to access Period (EEP), during which you keep your benefits as long as your earnings stay below the Substantial Gainful Activity (SGA) level — roughly $1,550 per month in 2024, though this changes yearly.

Wages you earn during the TWP and EEP count as income for tax purposes. If your wages push you above the filing threshold, you must file a return. You will report these wages on a Form 1040 and Schedule C (if self-employed) or attach your W-2 (if employed by someone else). The fact that you are on SSDI does not change how you report wages — you report them the same way anyone else does.

Keep records of all wages, including pay stubs and any 1099 forms your employer sends you. These documents prove your income to the IRS and also to Social Security, which monitors your earnings to make sure you stay within work incentive rules.

When part of your SSDI becomes taxable

In rare cases, part of your SSDI can be taxed. This happens only when your total income — including SSDI — is very high. The IRS uses a formula called "combined income," which adds your adjusted gross income, tax-exempt interest, and half of your SSDI benefits. If combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly), up to 50 percent of your SSDI may be taxable. If combined income exceeds $34,000 (single) or $44,000 (married), up to 85 percent may be taxable.

This rule almost never affects SSDI beneficiaries who have little other income. It applies mainly to people with substantial pensions, investment income, or high wages. If you are in this situation, a tax professional can help you understand how much of your SSDI is taxable and what you owe.

How to file your return

You can file by mail, online, or with a tax professional. The IRS offers free filing software through its Free File program if your income is below a certain level — roughly $79,000 in recent years. You can also use commercial software like TurboTax or H&R Block, or work with a CPA or tax preparer.

When you file, report your non-SSDI income on the appropriate forms. If you have W-2 wages, attach the W-2 to your return. If you are self-employed, complete Schedule C and attach it. If you have interest or dividends, report them on Schedule B or Schedule 1, depending on the amount. Do not report SSDI on your return unless part of it is taxable (which, as noted above, is rare).

File by April 15 of the year after the income year. If you cannot file by then, you can request an extension, though an extension to file is not an extension to pay — if you owe taxes, you still owe them by April 15 even if you file later.

What records you need to keep

Keep copies of all documents that show your income: W-2 forms from employers, 1099 forms for self-employment or contract work, bank statements showing interest, investment statements showing dividends, and any other income records. Also keep your SSDI award letter and any notices from Social Security about your benefits, in case the IRS or Social Security ever questions your return.

If you use a tax professional, keep a copy of the return they file on your behalf and any worksheets they use. These documents help you prove what you reported if you are ever audited. The IRS generally has three years to audit a return, though it can go back longer in some cases.

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 it is your only income source, you have no filing requirement. You do not need to report it on a tax return.

What if I earned money from work but it was very little?

If your earnings are below the filing threshold for your age and status, you do not have to file. However, if your employer withheld taxes from your paychecks, filing may get you a refund, so it is worth doing even if not required.

Does working during my Trial Work Period affect my taxes?

Yes. Wages you earn during the TWP count as income for tax purposes and must be reported if they push you above the filing threshold. The TWP itself does not affect your SSDI check, but the wages are still taxable income.

Can I deduct my medical expenses on my tax return?

You can deduct medical expenses only if you itemize deductions and your total medical expenses exceed 7.5 percent of your adjusted gross income. Most people take the standard deduction instead, which is simpler. A tax professional can tell you which approach saves you more.

What if I disagree with how much tax I owe?

If you believe the IRS made an error, you can file an amended return (Form 1040-X) within three years of the original filing date. If you owe money and cannot pay, the IRS offers payment plans and can sometimes reduce penalties if you have a good reason for underpaying.