Most SSDI recipients do not have to file federal income taxes
Social Security Disability Insurance (SSDI) payments themselves are not taxable income in most cases. This means that if SSDI is your only source of income, you will not owe federal income tax and do not have to file a federal tax return.
However, the rule changes if you have other income. If you earn money from work, receive interest or dividends, or have other sources of income alongside your SSDI, you may be required to file. The threshold depends on your age, filing status, and the type of income you receive.
A small portion of your SSDI benefits can become taxable if your "combined income" exceeds certain limits. Combined income includes your SSDI payments plus half of your benefits plus any other income you have. This is a specific calculation, not your total earnings.
Key Takeaways
- SSDI payments alone are not taxable, so you do not file taxes if SSDI is your only income.
- If you have other income—from work, investments, or other sources—you may have to file even if you owe no tax.
- Up to 85 percent of your SSDI benefits can become taxable if your combined income is high enough, though this affects relatively few recipients.
- The IRS uses a specific formula to determine combined income, and you can use the Social Security Administration's worksheet to calculate whether you owe tax.
When you must file a tax return as an SSDI recipient
You must file a federal tax return if your gross income exceeds the standard deduction for your filing status and age. For 2024, the standard deduction is $14,600 for a single filer under 65, and $18,350 for a single filer 65 or older. If you are married filing jointly, the amounts are higher.
The income that counts toward this threshold includes wages from work, self-employment income, interest, dividends, and capital gains—but not your SSDI payments themselves. If you earned $15,000 from part-time work and receive $1,500 per month in SSDI, you would file based on the $15,000, not the SSDI amount.
Even if your income is below the standard deduction, you should file if you had taxes withheld from your paychecks. Filing allows you to claim a refund of those withheld taxes. You may also want to file to claim the Earned Income Tax Credit (EITC) if you work and have low income, since this credit can result in a refund even if you owe no tax.
How SSDI benefits can become taxable income
The Social Security Administration taxes SSDI benefits using a formula based on "combined income." Combined income is calculated as your adjusted gross income plus non-taxable interest plus half of your SSDI benefits. This is not the same as your total income.
If your combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly), up to 50 percent of your SSDI benefits become taxable. If your combined income exceeds $34,000 (single) or $44,000 (married filing jointly), up to 85 percent of your benefits become taxable. These thresholds have not changed since 1993.
In practice, very few SSDI recipients pay tax on their benefits. The thresholds are low relative to current income levels, but most SSDI recipients have little or no income beyond their benefits. If you work part-time or have investment income, you are more likely to cross these thresholds.
How to determine if you owe tax on SSDI
The Social Security Administration publishes a worksheet in Publication 915 that walks you through the calculation. You will need your SSDI benefit statement (which shows your annual benefits), your W-2 forms or 1099 forms from any work or other income, and your tax return documents.
Start by adding your adjusted gross income, non-taxable interest, and half your SSDI benefits. Compare this combined income to the thresholds above. If you are below the first threshold ($25,000 for single filers), none of your benefits are taxable. If you are above it, use the worksheet to calculate the taxable portion.
Many tax software programs will calculate this for you if you enter your SSDI information. If you file with a tax professional, bring your Social Security benefit statement so they have the correct annual amount. The IRS also has a telephone line (1-800-829-1040) where you can ask questions about whether your benefits are taxable.
Reporting SSDI on your tax return
If any of your SSDI benefits are taxable, you report them on Form 1040 (the main federal income tax form). The Social Security Administration sends you a Form SSA-1099 each January showing your total benefits for the previous year. You use this form to fill in the SSDI amount on your tax return.
You do not report SSDI on a Schedule C or Schedule 1—it goes directly on the main form. If you use tax software, you will enter the amount from your SSA-1099, and the software will calculate the taxable portion based on your other income.
Keep your SSA-1099 with your tax records. The IRS matches the amount you report to the copy the Social Security Administration sends them, so the numbers must match.
State income tax and SSDI
Most states do not tax SSDI benefits, even if the federal government does. However, a few states have their own rules. Vermont, Colorado, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, and Utah tax SSDI benefits in some circumstances, usually when your income exceeds a state-specific threshold.
If you live in one of these states and have income beyond your SSDI, check your state's tax agency website or contact them directly to learn whether you owe state tax. State thresholds and calculations differ from federal rules, so you may owe state tax even if you owe no federal tax, or vice versa.
Your state tax return is separate from your federal return. You file both if you owe state tax, and you report your SSDI using the same SSA-1099 form.
What happens if you do not file when you should
If you owe tax and do not file, the IRS can assess penalties and interest on the amount owed. The failure-to-file penalty is usually 5 percent of the unpaid tax per month, up to 25 percent. Interest accrues daily at a rate set quarterly by the IRS.
If you filed late but did not owe tax, there is no penalty. If you are owed a refund and do not file, you can still claim it, but you must file within three years of the original important date. After three years, the refund is forfeited to the U.S. Treasury.
If you realize you should have filed in a previous year, file that year's return as soon as possible. The IRS often works with taxpayers on payment plans if you owe a small amount, and penalties may be reduced if you have a reasonable explanation for the delay.
Frequently Asked Questions
Do I have to file taxes if I only receive SSDI and no other income?
No. SSDI payments are not taxable income, so if SSDI is your only source of income, you do not have to file a federal tax return. You may choose to file anyway if you had taxes withheld from other income in the past or if you want to claim a refundable tax credit.
I work part-time and receive SSDI. Do I have to file?
Yes. Your wages from work count as gross income and may push you above the standard deduction threshold. You must file a federal tax return. Your SSDI itself is not taxable, but your wages are, and you may owe tax on the combination of the two.
What if I receive both SSDI and SSI?
Supplemental Security Income (SSI) is also not taxable. However, if you receive both SSDI and SSI plus other income, you file based on the other income. The SSDI and SSI amounts themselves do not count toward your filing requirement, but they may affect whether your benefits are taxable if you have additional income.
Can I file my taxes online if I receive SSDI?
Yes. You can use tax software, file through a tax professional, or file by mail. The process is the same as for any other taxpayer. You will need your SSA-1099 form and any other income documents (W-2s, 1099s, etc.). Free tax software is available through the IRS Free File program if your income is below a certain threshold.
What if the IRS says I owe tax on SSDI I did not think was taxable?
Contact the IRS at 1-800-829-1040 or visit irs.gov to request a review. Bring your SSA-1099, your tax return, and any other income documents. The IRS can recalculate your combined income and explain whether the tax is correct. If you disagree, you can request an appeal.