Most people on SSDI must file a tax return, but the rules depend on how much non-benefit income you earn

Social Security Disability Insurance (SSDI) benefits themselves are not taxable income. However, you may owe federal income tax on other money you earn — wages, self-employment income, interest, or dividends — and the IRS requires you to report it. Whether you actually have to file a return depends on how much of that non-benefit income you received in a given year, not on the SSDI itself.

If you earned no money outside of SSDI, you do not file a federal tax return. If you earned some money, you file only if your total income crosses the threshold the IRS sets each year. That threshold is lower for people who are blind or over 65, and it changes annually.

SSI (Supplemental Security Income) works the same way: the SSI payments are not taxable, but any other income you have may be. The difference is that SSI has strict limits on how much you can earn before your benefits themselves are reduced, which is a separate issue from whether you file taxes.

Key Takeaways

  • SSDI and SSI payments are not counted as taxable income by the IRS, so you do not owe tax on the disability benefit itself.
  • You must file a tax return if your non-benefit income (wages, self-employment, interest, or other earnings) exceeds the IRS threshold for your age and filing status.
  • The income threshold that triggers a filing requirement changes each year and is lower for people age 65 or older or who are blind.
  • Filing a return when you have little or no tax owed can still be worth doing, because you may be due a refund from the Earned Income Tax Credit or other credits.

How the IRS counts income when you receive SSDI

The IRS does not count SSDI as income on your tax return. This is true whether you receive $500 a month or $3,000 a month. You do not report the SSDI amount anywhere on Form 1040 or any other federal tax form.

What you do report is everything else: wages from a job, net profit from self-employment, interest from a bank account, dividends from investments, rental income, or any other money that came in. Add all of that together. If the total is below the threshold for your situation, you do not have to file. If it meets or exceeds the threshold, you file a return and report what you earned.

The Social Security Administration sends you a Form SSA-1099 each January showing how much SSDI you received that year. You keep this for your records, but you do not attach it to your tax return or send it to the IRS. It is informational only.

The income thresholds that determine whether you file

The IRS sets a filing threshold each year. For 2024, a single person under 65 with only wage income must file if they earned $14,600 or more. If you are 65 or older, the threshold is $18,350. If you are blind, the threshold is higher still. These numbers change each year, usually by a small amount.

If your only income is wages and you are under 65, you file only if you earned $14,600 or more in 2024. If you earned $14,599, you do not have to file — though you may want to, as explained below.

If you have self-employment income, the threshold is lower: $400 or more in net self-employment income requires you to file, regardless of your age or other income. This is because self-employment tax (Social Security and Medicare tax on your own earnings) is owed separately from income tax.

The IRS publishes updated thresholds each November for the coming year. You can find them on IRS.gov or ask a tax preparer to confirm the current year's numbers.

Why you might file even if you do not have to

If your income is below the filing threshold, you are not required to file. However, filing anyway can put money in your pocket through tax credits you would otherwise miss.

The Earned Income Tax Credit (EITC) is the most common reason. If you worked and earned between roughly $400 and $60,000 (the range varies by filing status and number of dependents), you may be due a credit that reduces your tax or gives you a refund. You claim the EITC only by filing a return. The IRS will not send it to you automatically.

The Child Tax Credit and the Credit for Other Dependents work the same way: you must file to claim them. If you have children or other dependents, filing even with low income can result in a refund of several hundred or several thousand dollars.

If your employer withheld federal income tax from your paychecks, filing a return is how you get that money back. Even if you owe no tax, the withholding is refunded only when you file.

How SSI income limits differ from tax filing requirements

SSI has its own income rules that are separate from tax filing. SSI is a needs-based program, which means the Social Security Administration looks at how much money you have coming in each month and reduces your SSI payment if you earn too much.

For 2024, SSI counts the first $65 of your monthly earnings, plus half of anything above that, as income that reduces your benefit. If you earn $200 a month, SSI counts $65 plus half of $135, which is about $133 against your benefit. The rest of your earnings do not affect SSI.

This is not the same as the tax filing threshold. You could earn $500 a month and owe no federal income tax (because your annual income is below the threshold), but SSI would count part of that $500 against your benefit each month. Conversely, you could earn $15,000 in one month and have to file a tax return, but if you earned nothing the other eleven months, SSI would only count the income from the month you worked.

If you receive SSI, you need to report all earnings to Social Security, whether or not you file a tax return. Failing to report work income to Social Security can result in an overpayment you must repay.

What to do if you are unsure whether to file

The safest approach is to file a return if you earned any money outside of SSDI or SSI during the year. Filing when you do not have to costs nothing and takes a few hours. If you owe no tax, you owe nothing. If you are due a refund, you get it. If you missed a credit, filing captures it.

You can file on your own using free software through the IRS Free File program if your income is below a certain level (usually around $79,000). You can also use a tax preparer, many of whom offer free or low-cost service to people with low income. The IRS Volunteer Income Tax information (VITA) program offers free tax preparation at libraries, community centers, and other locations.

If you are on SSI, report all work income to Social Security regardless of whether you file a tax return. You can do this by phone, by mail, or in person at your local Social Security office. Reporting protects you from an overpayment later.

Frequently Asked Questions

Do I have to report my SSDI to the IRS when I file taxes?

No. SSDI is not taxable income, so you do not report it on your tax return. You keep the Form SSA-1099 for your records, but you do not send it to the IRS or include it on Form 1040.

If I earned $10,000 last year and receive SSDI, do I have to file?

It depends on your age and filing status. If you are under 65 and single, the 2024 threshold is $14,600, so you would not have to file. If you are 65 or older, the threshold is $18,350, so you still would not have to file. However, filing anyway might get you a refund or a tax credit, so it is worth checking.

Can I get a refund if I do not owe any tax?

Yes, if you had taxes withheld from your paychecks or if you are due a refundable credit like the EITC. You receive the refund only by filing a return. The IRS does not send refunds automatically.

What happens if I work and receive SSI instead of SSDI?

SSI counts part of your earnings against your monthly benefit, which is separate from whether you file taxes. Report all work income to Social Security each month. You may also have to file a tax return if your earnings cross the IRS threshold, but that is a separate requirement.

Where do I find the current year's income threshold for filing?

The IRS publishes filing thresholds each November on IRS.gov. You can also call the IRS at 1-800-829-1040 or ask a tax preparer. The threshold changes slightly each year based on inflation.