Most people on SSDI do not have to file a tax return

Social Security Disability Insurance (SSDI) payments are not taxable income in the way wages are. The IRS does not require most people whose only income is SSDI to file a federal tax return at all. If SSDI is your only source of income and you have no other earnings, you will almost certainly not owe taxes and will not need to file.

The rule changes only if you have other income alongside your SSDI — and the threshold is low. Even a small amount of income from work, interest, dividends, or other sources can trigger a filing requirement. The IRS uses a formula to determine whether any of your SSDI is taxable, and that formula depends on what else you earned that year.

The safest approach is to check your specific situation rather than assume. Your SSDI payment stub (called a benefit statement) shows exactly what you received. If you earned anything else — even part-time work, a pension, or investment income — you should verify whether you need to file.

Key Takeaways

  • SSDI by itself is not taxable income, and you do not have to file a tax return if it is your only income source.
  • If you earned wages, self-employment income, interest, or dividends in the same year, you may have to file even if you owe no tax.
  • The IRS uses a formula called "combined income" to determine whether any SSDI becomes taxable; it includes half your SSDI plus all other income.
  • You can use IRS Publication 915 or a tax professional to calculate whether you owe tax on any portion of your SSDI.
  • Filing a return when you do not owe tax can still be worth doing if you are due a refund from taxes withheld or if you may have access to for the Earned Income Tax Credit.

When SSDI becomes taxable income

SSDI becomes taxable only when your total income crosses a threshold set by the IRS. The IRS calls this threshold your "combined income," and it is calculated in a specific way: take half of your SSDI benefits, add all your other income (wages, self-employment, interest, dividends, pensions), and see where you land.

For a single person in 2024, if your combined income exceeds $25,000, some of your SSDI may be taxable. For married couples filing jointly, the threshold is $32,000. These thresholds do not change year to year, but you should verify the current year's amounts with the IRS or a tax professional, as they can be adjusted.

If you cross the threshold, the amount of SSDI that becomes taxable is not your entire benefit. Instead, the IRS taxes either 50% or 85% of the excess, depending on how far over the threshold you go. This is a complex calculation, which is why many people use IRS Publication 915 or hire a tax preparer to work it out.

Other income that counts toward the threshold

The IRS includes almost any income in the combined income calculation. Wages from a job count. Self-employment income counts. Interest from a savings account counts. Dividends from stocks count. Rental income counts. Pension payments count. Even some types of nontaxable income — like tax-exempt interest from municipal bonds — count toward the threshold.

The one major exception is Supplemental Security Income (SSI), which is a different program from SSDI. SSI is not counted in the combined income formula, so if you receive both SSDI and SSI, the SSI does not push you over the threshold.

If you are unsure whether a particular type of income counts, the IRS Publication 915 lists what to include. A tax professional can also walk you through what applies to your situation.

How to learn about you owe tax on SSDI

Start by gathering your benefit statement from Social Security. This document shows your total SSDI for the year. You can request it online at ssa.gov or by calling 1-800-772-1213. You will also need records of any other income you earned — W-2 forms from employers, 1099 forms for self-employment or investment income, or bank statements showing interest.

Once you have those documents, you can use IRS Publication 915 to calculate your combined income and determine whether any SSDI is taxable. The publication includes a worksheet that walks you through the math step by step. If the math feels overwhelming, a tax preparer or a free tax clinic (often run by nonprofits or libraries) can do the calculation for you.

If you find that you do owe tax on some SSDI, you have options. You can file a return and pay what you owe. You can also ask Social Security to withhold taxes from your SSDI payments going forward, which spreads the tax burden across the year rather than paying it all at once when you file.

Filing a return even if you do not owe tax

Even if you determine that you do not owe any tax on your SSDI, filing a return may still be worth doing. If your employer withheld taxes from your wages, you may be due a refund. If you earned income below the threshold and had taxes taken out, filing gets that money back to you.

You may also be due the Earned Income Tax Credit (EITC) if you worked and earned below a certain amount. The EITC is a refundable credit, meaning you can receive money even if you owe no tax. To claim it, you have to file a return — Social Security will not send it to you automatically.

The important date to file a federal tax return is usually April 15, though it can shift by a day or two depending on the calendar. If you file after that date, you may lose the chance to claim a refund, so it is worth checking whether you are due one.

Withholding taxes from your SSDI payments

If you know that some of your SSDI will be taxable and you want to avoid a large bill when you file, you can ask Social Security to withhold federal income tax from your monthly benefit. This is optional — you do not have to do it — but many people find it easier to pay a small amount each month than to owe a lump sum later.

To set up withholding, you fill out Form W-4V and send it to your local Social Security office or mail it to the address on the form. You choose what percentage of your benefit to withhold — 7%, 10%, 15%, or 25%. Social Security will then reduce your monthly payment by that amount and send the withheld money to the IRS.

You can change or stop withholding at any time by submitting a new Form W-4V. This is useful if your other income changes during the year or if you realize you withheld too much or too little.

State taxes and SSDI

Most states do not tax SSDI, but a few do. The states that tax SSDI are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont. If you live in one of these states, you may owe state income tax on some of your SSDI even if you do not owe federal tax.

The rules for state taxation of SSDI vary by state. Some states use the same combined income threshold as the federal government; others have different thresholds or different percentages of SSDI that become taxable. If you live in a state that taxes SSDI, contact your state's tax authority or a tax professional to find out what you owe.

Frequently Asked Questions

Do I have to file a tax return if SSDI is my only income?

No. If SSDI is your only income and you have no wages, self-employment income, interest, or other earnings, you do not have to file a federal tax return. SSDI is not taxable income on its own, and the IRS does not require you to report it.

What if I earned $5,000 from part-time work and received $15,000 in SSDI?

You may have to file a return. Your combined income would be $12,500 (half of $15,000 plus $5,000), which is below the $25,000 threshold for a single person, so you would not owe tax on the SSDI itself. However, you might owe tax on the wages, and you should file to check whether you are due a refund or the Earned Income Tax Credit.

Can I ask Social Security to withhold taxes so I do not have to pay a big bill later?

Yes. Fill out Form W-4V and submit it to your local Social Security office. You choose to withhold 7%, 10%, 15%, or 25% of your monthly benefit. Social Security sends the withheld amount to the IRS, and you can change or stop withholding anytime by submitting a new form.

What if I live in a state that taxes SSDI?

Contact your state's tax authority or a tax professional to find out the rules. Some states use the same threshold as the federal government; others have different rules. The states that tax SSDI are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont.

Where do I find IRS Publication 915?

You can read it free from irs.gov or request a printed copy by calling 1-800-829-3676. The publication includes a worksheet to calculate whether any of your SSDI is taxable. A tax preparer or free tax clinic can also walk you through the calculation.