Whether You Must File Taxes on SSDI Income

You may owe federal income tax on your SSDI benefits, depending on your total income and filing status. The Social Security Administration does not automatically withhold taxes from SSDI payments, so you need to determine whether you have a tax filing obligation each year.

The threshold for owing taxes is based on your combined income, which includes your SSDI benefits plus any other income you received (wages, interest, pensions, rental income, and so on). If your combined income exceeds a certain amount, you must file a federal tax return. The threshold varies by filing status and age.

For 2024, if you are single and under 65, you must file if your combined income exceeds $14,600. If you are married filing jointly and both spouses are under 65, the threshold is $29,200. These thresholds increase slightly if you are 65 or older. However, these numbers change each year, so you should verify the current threshold on the IRS website or with a tax professional before deciding not to file.

Key Takeaways

  • You calculate whether you owe taxes using combined income, which includes your SSDI plus all other income, not SSDI alone.
  • The IRS provides a worksheet to determine how much of your SSDI is taxable, and you will need your Social Security statement (Form SSA-1099) to complete it.
  • You can request that Social Security withhold taxes directly from your SSDI payments if you expect to owe, which prevents a large bill at tax time.
  • If you file taxes and claim SSDI income, you report it on Form 1040 using the amounts shown on your Form SSA-1099.
  • Filing even when you do not owe can be worthwhile if you are due a refund or want to claim the Earned Income Tax Credit.

Obtaining Your Social Security Tax Statement (Form SSA-1099)

Social Security sends you a Form SSA-1099 each January showing the total SSDI benefits you received in the previous year. This form is essential for filing your taxes because it contains the exact dollar amount the IRS expects you to report.

You can receive this form by mail, or you can create a my Social Security account at ssa.gov and view it online. If you have already created an account, log in and select "Benefit Verification" to see your statement. If you have not created an account, you will need your Social Security number, date of birth, and a valid email address to register.

If you do not receive your Form SSA-1099 by early February, contact Social Security at 1-800-772-1213 to request a replacement. Have your Social Security number ready. You can also request a paper copy by mail if you prefer not to use the online account.

Calculating How Much of Your SSDI Is Taxable

Not all of your SSDI benefits are necessarily taxable. The IRS uses a formula to determine the taxable portion based on your combined income. You will need to work through a worksheet provided by the IRS, or have a tax professional do it for you.

The worksheet asks you to add up all your income sources: wages, interest, dividends, pensions, rental income, and half of your SSDI benefits. Then you compare that total to two thresholds. If your combined income is below the first threshold, none of your SSDI is taxable. If it is above the first threshold but below the second, up to 50 percent of your benefits may be taxable. If it is above the second threshold, up to 85 percent of your benefits may be taxable.

The thresholds depend on your filing status. For 2024, the first threshold for a single filer is $25,000, and the second is $34,000. For married filing jointly, the thresholds are $32,000 and $44,000. These amounts change annually. The IRS publishes a detailed worksheet in Publication 915, which you can read free from irs.gov.

Filing Your Tax Return With SSDI Income

Once you know how much of your SSDI is taxable, you report it on your federal tax return using Form 1040. You will enter the taxable portion of your SSDI on the line designated for Social Security benefits. Attach a copy of your Form SSA-1099 to your return when you mail it, or include it when you file electronically.

If you use tax software, the program will walk you through entering your SSDI information. If you file by mail, use the instructions that come with Form 1040 to locate the correct line. If you use a tax professional or visit a free tax preparation site, bring your Form SSA-1099 with you so they have the exact figures.

You can file your return on paper by mail or electronically through the IRS Free File program if your income is below a certain threshold, or through commercial tax software. The important date to file is typically April 15, though you can request an extension if you need more time.

Requesting Tax Withholding on Your SSDI Payments

If you expect to owe taxes on your SSDI, you can ask Social Security to withhold a percentage of your monthly payment and send it to the IRS. This prevents you from facing a large tax bill when you file and reduces the chance of owing penalties.

To request withholding, complete Form W-4V (Voluntary Withholding Request) and submit it to your local Social Security office in person, by mail, or online through your my Social Security account. You can choose to withhold 7, 10, 15, or 25 percent of your monthly benefit. Social Security will begin withholding the following month.

You can change or stop withholding at any time by submitting a new Form W-4V. If you want to adjust the amount you are withholding mid-year, you can do so, though the change takes effect the following month. Keep a record of your withholding request for your own files.

What to Do If You Owe Taxes or Receive a Refund

If you file your return and discover you owe taxes, you can pay the IRS directly online, by mail, or through an installment plan if you cannot pay in full. The IRS website (irs.gov) lists payment methods and allows you to set up a payment plan if needed. If you owe a small amount, paying when ready avoids interest and penalties.

If you are due a refund, the IRS will send it to you by direct deposit or check, depending on how you filed. Direct deposit is faster, typically arriving within 21 days of the IRS processing your return. If you filed by mail, allow additional time for the IRS to receive and process your return.

If you filed in previous years and did not report your SSDI income, you can file an amended return using Form 1040-X for any year within the past three years. This corrects your record with the IRS and may result in a refund if you overpaid or a bill if you underpaid.

Free Tax Preparation Resources

If you cannot afford to pay for tax preparation, the IRS offers free filing through the Free File program. You must have an income below a certain threshold (which varies by year) to may have access to. Visit irs.gov/freefile to find a list of participating tax software companies that offer free federal returns.

You can also visit a Volunteer Income Tax information (VITA) site in your area, where trained volunteers prepare returns at no cost. To find a VITA site near you, call 211 or visit the IRS locator tool on irs.gov. Bring your Form SSA-1099, any other income documents, and a photo ID.

Some disability organizations and senior centers also offer free tax preparation during tax season. Contact your local Area Agency on Aging or disability services office to ask whether they know of a free preparation service in your area.

Frequently Asked Questions

Do I have to file taxes if my only income is SSDI?

Not necessarily. If SSDI is your only income and it is below the filing threshold for your age and filing status, you do not have to file. However, if you have any other income—even a small amount of wages or interest—you may cross the threshold and be required to file. Check the current threshold for your situation before deciding.

What if I did not file taxes in previous years when I received SSDI?

You can file amended returns for the past three years using Form 1040-X. The IRS may assess penalties and interest if you owed taxes and did not pay, but filing now stops additional penalties from accumulating. A tax professional can help you determine which years need to be amended.

Can I claim the Earned Income Tax Credit if I receive SSDI?

You cannot claim the Earned Income Tax Credit based on SSDI income alone, because SSDI is not earned income. However, if you also have wages from work, you may be able to claim the credit based on those wages. Check the IRS website or ask a tax professional whether you meet the income and work requirements.

What happens if I withhold too much or too little from my SSDI payments?

If you withhold too much, you will receive a refund when you file your return. If you withhold too little, you will owe when you file. You can adjust your withholding at any time by submitting a new Form W-4V to Social Security, so you can correct the amount before the next tax year.

Do I need to report my SSDI to the IRS if I am not filing a return?

If you are not required to file a return, you do not need to report your SSDI to the IRS. However, if you are required to file and you do not, the IRS may contact you. If you are unsure whether you must file, use the IRS filing requirement worksheet on irs.gov or contact a tax professional.