SSDI benefits are not taxable income for most recipients, but you may still need to report them on your tax return depending on your total income

Social Security Disability Insurance (SSDI) payments themselves are not subject to federal income tax. However, the IRS requires you to report them on your tax return if your combined income exceeds certain thresholds. "Combined income" means your SSDI plus any other income you receive — wages, interest, pensions, or other benefits. Whether you actually owe tax on the SSDI depends on this total, not on the SSDI alone.

The threshold that triggers tax on SSDI is $25,000 for single filers and $32,000 for married couples filing jointly. If your combined income stays below these amounts, you do not owe federal tax on your SSDI, though you may still file a return for other reasons — to claim a refund of withheld taxes, for instance, or to document income for a loan process.

If your combined income exceeds the threshold, up to 85 percent of your SSDI may become taxable. This does not mean you pay tax on 85 percent of the full amount; it means the IRS counts up to 85 percent of your SSDI as taxable income when calculating what you owe. The actual tax you pay depends on your tax bracket and other deductions.

Key Takeaways

  • SSDI payments are not taxable by themselves, but you must report them on your tax return if your combined income (SSDI plus all other income) exceeds $25,000 for single filers or $32,000 for married couples filing jointly.
  • Combined income includes wages, self-employment income, interest, dividends, pensions, and other Social Security benefits — not just SSDI.
  • If you are below the threshold, you do not owe federal tax on SSDI, but filing a return may still benefit you if you had taxes withheld or meet other filing requirements.
  • The Social Security Administration sends Form SSA-1099 each January showing your SSDI payments for the prior year; use this to complete your tax return.
  • Some states tax SSDI, though most do not; check your state's rules or contact your state tax authority to confirm.

How to calculate whether your SSDI is taxable

Start by adding up all your income for the year. This includes your SSDI payments, any wages or self-employment income, interest and dividends, pensions, annuities, and any other Social Security benefits (such as spousal or survivor benefits). Do not include Supplemental Security Income (SSI), which is a separate program and is never taxable.

Once you have your total, compare it to the threshold for your filing status. If you are single and your combined income is $25,000 or less, your SSDI is not taxable. If you are married filing jointly and your combined income is $32,000 or less, your SSDI is not taxable. If you are married filing separately, the threshold is $0 — meaning any SSDI at all may be taxable if you file separately from your spouse.

If your combined income exceeds the threshold, use IRS Worksheet 1 (for most people) or Worksheet 2 (if you received railroad retirement benefits) to calculate how much of your SSDI becomes taxable. These worksheets are in IRS Publication 915, available free on irs.gov. The calculation is complex, but the worksheets walk you through it step by step. If the math is unclear, a tax preparer or the IRS Helpline (1-800-829-1040) can help.

What documents you need to file

The Social Security Administration mails Form SSA-1099 to you by January 31 each year. This form shows the total SSDI you received in the prior calendar year. You will need this form to complete your tax return accurately. Keep it with your tax records.

If you also received other income — wages, interest, self-employment income — you will receive other forms as well. Your employer sends Form W-2 for wages. Banks and investment firms send Form 1099-INT for interest or Form 1099-DIV for dividends. If you are self-employed, you track your income and expenses yourself and report them on Schedule C.

Gather all these forms before you start your return. If you are missing a form by February 15, contact the issuer directly — the IRS does not send them late. If you file before receiving a form, you can file an amended return (Form 1040-X) once the form arrives.

Filing your return when SSDI is not taxable

If your combined income is below the threshold and none of your SSDI is taxable, you still have the option to file a return. Many people do even when they are not required to, because filing can result in a refund. If your employer withheld federal income tax from your wages, or if you made estimated tax payments, filing a return is the only way to get that money back.

To file, you can use free tax software (the IRS maintains a list of free options at irs.gov), work with a tax preparer, or file by mail using paper forms. When you file, report your SSDI on line 5b of Form 1040 or 1040-SR. Even though it is not taxable, the IRS wants to see it on your return so they can verify your income matches what Social Security reported.

If you do not file because you are not required to and have no refund coming, that is legally acceptable. However, keep your SSA-1099 and other income documents for at least three years in case the IRS asks questions later.

Filing your return when some SSDI becomes taxable

If your combined income exceeds the threshold, use IRS Publication 915 and the worksheets inside it to calculate your taxable SSDI amount. This is the most complex part of the process, but the worksheets are designed for people without tax training.

Once you know how much SSDI is taxable, report it on your tax return. The taxable portion goes on line 5b of Form 1040 or 1040-SR, along with your total SSDI amount. The IRS software and most tax preparation services will walk you through this calculation if you enter your income correctly.

If you find the calculation confusing, you have options. The IRS Helpline (1-800-829-1040) can answer questions about Publication 915. A tax preparer or CPA can do the calculation for you, usually for a modest fee. Some community organizations offer free tax preparation through the Volunteer Income Tax information (VITA) program; search for VITA sites near you on irs.gov.

State income tax and SSDI

Most states do not tax SSDI benefits. However, a small number of states — including Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont — may tax SSDI under certain circumstances. The rules vary by state and change periodically.

To find out whether your state taxes SSDI, contact your state's tax authority or revenue department directly. Many state tax agencies have websites that explain their rules. If your state does tax SSDI, you will need to file a state return in addition to your federal return and report your SSDI income there as well.

If you live in a state that taxes SSDI and your income is high enough to owe state tax, the state will provide its own worksheets or instructions for calculating the taxable amount. The process is similar to the federal calculation but may use different thresholds.

What happens if you do not report SSDI on your taxes

If you are required to file a return and do not, the IRS may send you a notice. Social Security reports all SSDI payments to the IRS, so the agency knows you received the money. If your income was above the filing threshold and you did not file, the IRS can assess penalties and interest on any tax you owe.

If you missed filing in a prior year, you can still file an amended return. Use Form 1040-X and send it to the IRS address shown in the instructions. Filing late is better than not filing at all, because it stops penalties from growing and may allow you to claim a refund if you had taxes withheld.

If you are unsure whether you were required to file, the IRS Helpline can review your situation. Having your SSA-1099 and other income documents ready will help them answer quickly.

Frequently Asked Questions

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

No. If SSDI is your only income and it is below $13,850 (for 2023), you are not required to file a federal return. However, you may choose to file if you had taxes withheld from other sources or want documentation of your income for a loan or housing process.

What if I work part-time and receive SSDI at the same time?

Your wages count toward your combined income. If your wages plus SSDI exceed $25,000 (single) or $32,000 (married filing jointly), some of your SSDI may become taxable. Report your wages on your return using your W-2 form, and calculate your taxable SSDI using Publication 915.

Does SSI count toward the combined income threshold?

No. Supplemental Security Income (SSI) is never taxable and does not count toward the threshold that determines whether your SSDI is taxable. Only SSDI, wages, and other income sources count.

Can I file electronically if I receive SSDI?

Yes. You can file electronically using free IRS software, a tax preparer, or a CPA. Electronic filing is often faster and more accurate than paper filing, and you will receive your refund more quickly if one is due.

What if I received SSDI for only part of the year?

Your SSA-1099 will show only the SSDI you actually received. Use that amount on your return. If you started or stopped receiving SSDI mid-year, the form reflects the correct total for that year.