When You Have to File Taxes While Receiving SSDI

The short answer: it depends on your other income

You may have to file a tax return even though you receive Social Security Disability Insurance (SSDI), but SSDI payments themselves are not taxed. What matters is whether you have other income—from work, investments, pensions, or other sources—that pushes you over the IRS threshold for filing.

The IRS sets a filing threshold each year based on your age and filing status. If your total income (including half of your SSDI benefits, plus any other income) exceeds that threshold, you must file. The exact amount changes annually, so you need to check the current year's rules.

Even if you are not required to file, you may want to anyway—especially if taxes were withheld from other income or if you are owed a refund or tax credit like the Earned Income Tax Credit.

Key Takeaways

SSDI payments themselves are never taxed, but other income you receive may be, and that determines whether you must file.
The IRS filing threshold varies by year, age, and filing status—check the current year's threshold before deciding whether you must file.
If you work while receiving SSDI, your wages count toward the filing threshold and may trigger a requirement to file.
Filing even when not required can result in a refund or allow you to claim tax credits you are may have access to to.
If part of your SSDI is taxable (which happens only in specific situations), you report it on your tax return using Form SSA-1099.

How SSDI is treated for tax purposes

SSDI benefits are generally not taxable income. The Social Security Administration does not withhold federal income tax from your SSDI payments, and you do not report the SSDI amount itself as income on your tax return in most cases.

However, there is a narrow exception: if you have substantial income from other sources, a portion of your SSDI may become taxable. This happens only if your "combined income" (your adjusted gross income plus nontaxable interest plus half your SSDI) exceeds certain thresholds set by the IRS. For most SSDI recipients, this does not explore.

You will receive a Form SSA-1099 from Social Security each January showing your SSDI payments for the previous year. This form is for your records and to help you determine whether any of your benefits are taxable. You do not automatically report the full amount on your return.

When you must file a tax return

You must file a federal tax return if your gross income exceeds the IRS filing threshold for your situation. The threshold depends on three things: the current tax year, your age (65 or older has a higher threshold), and your filing status (single, married filing jointly, head of household, and so on).

For example, in 2023, a single person under 65 had to file if their gross income was $13,850 or more. A single person 65 or older had to file if their gross income was $17,550 or more. These amounts change each year. Check the IRS website or your tax software for the current year's thresholds.

If you have self-employment income (from work you do on your own), the threshold is lower—you must file if your net self-employment income is $400 or more, regardless of other income.

If you work while receiving SSDI, your wages count as gross income and may push you over the threshold. This is true even during the trial work period, when you can work and still receive full SSDI benefits.

Income that counts toward the filing threshold

When determining whether you must file, the IRS counts income from many sources. Wages from employment count in full. Interest and dividends count. Rental income, pension payments, and retirement account distributions all count. Income from self-employment counts.

SSDI itself does not count toward the threshold—only other income does. However, if you are in the rare situation where part of your SSDI is taxable (because your combined income is very high), that taxable portion would be included.

Certain types of income are not counted: Supplemental Security Income (SSI) is not taxable and does not count. Veterans benefits are generally not taxable. Some types of financial information do not count as income for tax purposes. If you are unsure whether a particular payment counts, ask a tax professional or check the IRS website.

What happens if part of your SSDI becomes taxable

In most cases, SSDI is not taxable at all. But if your combined income is high enough, up to 50% or 85% of your SSDI benefits may be taxable, depending on how much your combined income exceeds the IRS thresholds.

Combined income is calculated as: your adjusted gross income, plus nontaxable interest, plus half of your SSDI benefits. If this total exceeds $25,000 (for single filers) or $32,000 (for married filing jointly), some of your SSDI becomes taxable. If it exceeds $34,000 or $44,000 respectively, up to 85% may be taxable.

If any of your SSDI is taxable, you report it on your tax return. Your Form SSA-1099 will show the gross SSDI amount, and you (or a tax professional) will calculate the taxable portion using a worksheet in the IRS instructions. You then report that taxable amount on your return.

Filing even when you are not required to

Even if your income is below the filing threshold and you are not required to file, you may benefit from filing anyway. If your employer withheld federal income tax from your paychecks, you will not get that money back unless you file a return. Many people receive a refund after filing.

You may also be may have access to to tax credits—such as the Earned Income Tax Credit (EITC) or the Child Tax Credit—that you can only claim by filing. These credits can result in a payment to you, even if you owe no tax.

If you think you might owe tax or might be owed a refund, filing protects you. The IRS can assess penalties and interest if you owe tax and do not file, but there is no penalty for filing when you are not required to.

How to find out your filing threshold

The IRS publishes filing thresholds each year, usually in late 2024 for the 2024 tax year. You can find them on the IRS website (irs.gov) under "Filing Requirements" or in the instructions for Form 1040. Tax software also displays the current thresholds when you start preparing your return.

If you are unsure whether you must file, you can also contact the IRS directly at 1-800-829-1040, or visit an IRS Taxpayer information Center in your area. Many nonprofit organizations also offer free tax preparation help to people with low to moderate income.

Keep your Form SSA-1099 and any other income documents (W-2s, 1099s, bank statements showing interest) when you are deciding whether to file. These documents show your income for the year and help you calculate whether you have crossed the threshold.

Working while on SSDI and your tax obligations

If you work while receiving SSDI, your wages are counted as income for tax purposes. During the trial work period, you can earn any amount and still receive your full SSDI benefit, but your wages still count toward the filing threshold. You may have to file a tax return even though your SSDI is not affected.

After the trial work period ends, your SSDI benefit may be reduced if you earn above a certain amount (called substantial gainful activity, or SGA). But this is a separate calculation from taxes. Even if your SSDI is not reduced because your earnings are below SGA, you still have to file a tax return if your total income exceeds the IRS threshold.

Keep records of all your work income, including pay stubs and any 1099 forms from self-employment. These documents are essential for both your tax return and for Social Security to calculate your benefit correctly.

Frequently Asked Questions

Do I have to pay taxes on my SSDI payments?

No, SSDI payments are not taxed in the vast majority of cases. Only if you have very high income from other sources might a small portion of your SSDI become taxable. For most people receiving SSDI, the benefits themselves are completely tax-free.

What if I did not file taxes because I thought SSDI was not taxable?

If you had other income that should have been reported, you can file a late return. The IRS generally allows you to file back returns without penalty if you are owed a refund. If you owe tax, penalties and interest may explore, but filing is still the right step to take.

Can I use SSDI income to claim dependents or other tax credits?

SSDI itself does not count as income for claiming dependents. However, if you have other income (like wages), you may be able to claim dependents and credits based on that income. A tax professional can help you determine what credits you may have access to for.

Where do I report SSDI on my tax return?

In most cases, you do not report SSDI on your return at all—it is not taxable income. If a portion of your SSDI is taxable (which is rare), you report it on Form 1040 using a worksheet in the instructions. Your Form SSA-1099 will guide you through this calculation if it applies.

What if I receive both SSDI and SSI?

SSI (Supplemental Security Income) is also not taxable and does not count toward your filing threshold. Only your other income matters. If you receive both SSDI and SSI, you will get separate forms (SSA-1099 for SSDI and SSA-1099-Misc for SSI), but neither is taxable in the normal situation.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.