You may have to file taxes even if you receive SSDI, depending on your total income
Social Security Disability Insurance (SSDI) benefits themselves are not taxable income. However, if you have other income — from work, a pension, interest, or rental property — you may be required to file a federal tax return. The IRS does not care that part of your money comes from SSDI; it cares about your total income from all sources.
Whether you actually owe taxes is separate from whether you must file. You might have to file a return even if you owe nothing, because filing is how you claim refundable tax credits like the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit. These credits can put money in your pocket even if you paid no taxes during the year.
The threshold for filing depends on your age, filing status, and type of income. A single person under 65 with less than $13,850 in non-SSDI income in 2023 generally does not have to file. But if you have self-employment income of $400 or more, you must file regardless of your total income. These thresholds change yearly, so you should check the current year's rules before deciding not to file.
Key Takeaways
- SSDI payments are not counted as taxable income, but other income you receive during the same year is.
- You must file a tax return if your non-SSDI income exceeds the IRS threshold for your age and filing status, even if you owe no taxes.
- If you have any self-employment income, you must file if it totals $400 or more, regardless of other income.
- Filing a return can result in a refund or tax credits even if you paid no taxes, which is why many people with low income file anyway.
- The income thresholds change each year, so check the current rules before deciding whether you must file.
How the IRS counts your income when you receive SSDI
The IRS has a specific list of what counts as taxable income. SSDI is on the "do not count" list — it is excluded from gross income. This means you can receive $2,000 a month in SSDI and report $0 in SSDI income on your tax return.
Everything else you earn during that same year counts. If you work part-time and earn $8,000, that $8,000 is taxable income. If you receive a pension of $1,200 a month, that is taxable. Interest from a savings account, capital gains from selling stock, rental income, and self-employment income all count. The IRS adds these together to determine whether you cross the filing threshold.
Some income sources are partially taxable. For example, if you receive Social Security retirement benefits in addition to SSDI (which is rare but possible), part of those retirement benefits may be taxable depending on your "combined income" — a formula that includes non-taxable SSDI plus half your Social Security retirement benefits plus other income. This is one reason to consult a tax professional if you have multiple income sources.
Filing thresholds based on age and income type
The IRS sets different income thresholds depending on whether you are under or over 65, whether you are married, and whether you have self-employment income. These thresholds are adjusted each year for inflation. The IRS publishes updated thresholds in January or February for the prior tax year.
| Your Situation | 2023 Filing Threshold | Notes |
|---|---|---|
| Single, under 65, no self-employment income | $13,850 | You must file if your non-SSDI income exceeds this amount. |
| Single, 65 or older, no self-employment income | $17,550 | The threshold is higher for people 65 and older. |
| Any age, any filing status, with self-employment income | $400 | You must file if self-employment income is $400 or more, even if total income is below the standard threshold. |
| Married filing jointly, both under 65 | $27,700 | Combined income of both spouses determines the threshold. |
| Married filing jointly, one spouse 65 or older | $29,050 | The threshold increases by $1,350 for each spouse age 65 or older. |
If you are unsure whether you must file, the safest approach is to calculate your non-SSDI income and compare it to the current year's threshold published on IRS.gov. You can also use the IRS Interactive Tax Assistant tool on their website, which asks you questions about your income and filing status and tells you whether you must file.
When you should file even if you do not have to
Filing a tax return is optional if your income is below the threshold — but it may be worth doing anyway. The most common reason is to claim a refundable tax credit. The Earned Income Tax Credit (EITC) and the Additional Child Tax Credit are "refundable," meaning the IRS will send you money even if you owe no taxes and paid nothing in during the year.
If you worked part-time and had taxes withheld from your paychecks, filing a return is how you get that money back. Even if you earned below the filing threshold, you can file to claim a refund. The IRS will not send you a refund unless you file — it does not automatically know you overpaid.
If you have dependents, you may be able to claim the Child Tax Credit or other family-related credits. These can result in a substantial refund. Many people with SSDI and low work income file specifically to claim these credits, even though filing is not required.
How to report SSDI on your tax return
If you do file a return, SSDI appears on your tax form but with a $0 amount. On Form 1040 (the main federal tax return), there is a line for "Social Security benefits." You enter the amount of SSDI you received in that box, then on the next line you enter $0 as the taxable portion. This tells the IRS you received SSDI but that none of it is taxable.
You will receive a Form SSA-1099 from Social Security each January showing the total SSDI you received the prior year. This form is for your records; you do not send it to the IRS with your return. However, you use the amount on the SSA-1099 to fill in the Social Security benefits line on your Form 1040.
If you use tax software or work with a tax preparer, tell them you received SSDI. Many people worry this will complicate their return or trigger an audit, but it does not. Tax software has a straightforward field for SSDI, and preparers handle it routinely. The IRS expects to see SSDI reported this way.
Self-employment income and SSDI
If you work for yourself — as a freelancer, contractor, or small business owner — you must file a tax return if your net self-employment income is $400 or more, regardless of your total income or whether you receive SSDI. This is a separate rule from the standard income thresholds.
Self-employment income is what you earn after subtracting legitimate business expenses. If you earn $600 as a freelancer but spend $250 on supplies, your net self-employment income is $350, which is below the $400 threshold. However, if your net is $400 or more, you must file and pay self-employment tax (Social Security and Medicare tax on your business income).
This matters for SSDI recipients because earning too much can affect your benefits. SSDI has a "substantial gainful activity" (SGA) limit — in 2024, earning more than $1,550 per month in net self-employment income generally means you no longer meet the disability requirement and your benefits stop. You must report work income to Social Security, and you must file a tax return if your self-employment income hits $400. These are two separate obligations to two different agencies, and both explore.
What happens if you do not file when you should
If you are required to file but do not, the IRS can assess a failure-to-file penalty. The penalty is usually 5% of the unpaid taxes for each month you are late, up to 25%. If you owe no taxes, the penalty is smaller or zero, but you still face a delay in getting any refund you are owed.
More importantly, if you do not file, you cannot claim a refund. The IRS has a three-year window to issue refunds. If you are owed money and do not file within three years, that refund is forfeited to the government. For people with low income who may be may have access to to credits, this is a real loss.
If you realize you should have filed in a prior year, you can still file that return. There is no time limit on filing a return to claim a refund, though the IRS will only refund money from the past three years. Filing late for a year you owed taxes will result in penalties and interest, but filing late to claim a refund has no penalty.
Frequently Asked Questions
Does receiving SSDI mean I automatically have to file taxes?
No. SSDI itself is not taxable income. You only have to file if your income from other sources — work, pensions, interest, or self-employment — exceeds the IRS threshold for your age and filing status. If SSDI is your only income, you do not have to file.
If I work part-time while on SSDI, do I have to file taxes?
You have to file if your work income exceeds the threshold for your age (around $13,850 for a single person under 65 in 2023). You should also file if taxes were withheld from your paychecks, because filing is how you get a refund. Additionally, you must report all work income to Social Security, as it affects your SSDI benefits.
Will filing taxes affect my SSDI benefits?
Filing a tax return does not affect your SSDI benefits. However, the income you earn does. If you earn more than the substantial gainful activity limit (around $1,550 per month in 2024), Social Security may reduce or stop your benefits. You must report work income to Social Security regardless of whether you file taxes.
What if I owe taxes but cannot pay?
File your return anyway, even if you cannot pay the full amount owed. The IRS charges penalties and interest on unpaid taxes, but the penalties are smaller if you file on time than if you do not file. You can set up a payment plan with the IRS, and there are hardship programs for people with low income.
Can I claim the Earned Income Tax Credit if I receive SSDI?
Yes. The EITC is based on your work income, not on SSDI. If you worked and earned below the EITC income limit, you may be able to claim the credit by filing a tax return. This can result in a refund even if you owe no taxes. You must file to claim it — the IRS does not send it automatically.